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. Last Updated: 07/27/2016

Kiev Threatens to Renationalize RusAl Plant

KIEV -- Ukrainsky Aluminum, owner of Ukraine's only alumina plant, on Wednesday rejected government accusations that it had failed to meet investment obligations and said it would oppose attempts to renationalize its stake.

Mykhailo Chechetov, head of the State Property Fund, was quoted as saying Tuesday that the government was considering court proceedings against Ukrainsky Aluminum to renationalize its 30 percent stake in the plant, Mykolayivsky Hlynozemny Zavod.

Ukrainsky Aluminum, a subsidiary of Russian giant Russian Aluminum, bought the stake in Mykolayivsky in 2000 for $101 million. The two firms later increased their stakes in the plant to become majority shareholders.

The investor promised to build a new aluminum smelter and repay the plant's debts.

"Ukrainsky Aluminum may address the court with proceedings against the State Property Fund to prove that the company is meeting all its investment obligations," it said in a statement.

Analysts and investment bankers say the dispute could deter foreign investors and harm the government's reform credentials.

Chechetov said at a meeting of a parliamentary commission on privatization that he was unhappy with the way Ukrainsky Aluminum was implementing investment obligations and would try to return the plant to the state, local news agencies reported.

Ukrainsky Aluminum denied it had failed to meet its targets.