Privat Empire: What Does Oligarch Ihor Kolomoisky Own in Ukraine?
21 May, 2019

On May 16, a plane landed at the Dnipro airport. It carried a businessman and oligarch who has lived in Israel for some six months, and before that in Switzerland, and ran his business from afar. That evening, the same plane landed at the Boryspil Airport in Kyiv. Ihor Kolomoisky had returned to Ukraine.

According to Forbes’ estimates, his fortune in 2018 topped $1 billion. Analytical system YouControl links about 975 companies and 37 key persons with his business group Privat. And although PrivatBank is no longer a part of it, the group still bears this name. Officially, it is not registered, therefore, de jure, this group doesn’t exist. But de facto it exists. Furthermore, the structure combines a number of assets that are not under Kolomoisky’s name.

The three key stakeholders in Privat group are Kolomoisky, Gennadiy Bogolyubov, and Oleksiy Martynov. Bogolyubov returned to Ukraine just days before Kolomoisky.

The Kolomoisky-Bogolyubov business is large. These are mainly metallurgical and ferroalloy plants, as well as mining and processing plants and enterprises of the fuel and energy complex (oil production, oil refining, as well as trading networks that sell finished petroleum products).

Oil and Gas

Most of Privat’s assets are in the oil and gas sector. Kolomoisky and his partners own a third of JKX Oil & Gas shares and part of Ukrnaftoburinnya shares. In the gas business, Privat has a partner - businessman and parliamentarian Vitaliy Khomutynnik.

Many of the entities controlled by Kolomoisky are in the oil refining sector. Among them is the largest oil refining plant for gasoline - the Kremenchuk Refinery, which is owned by Ukrtatnafta. Until 2007, the controlling stake in Ukrtatnafta belonged to Tatarstan (28% to the Ministry of Land and Property of the Republic of Tatarstan and 26.9% to the state-owned company Tatneft). Another 43% of the plant’s shares were owned by Ukraine’s national oil and gas company Naftogaz while Privat only held 1.5%. But because of a number of court decisions, the purchase of shares by Tatarstan was invalidated, after which Privat bought them out. Now the Kremenchuk Refinery provides about 50% of gasoline on the fuel market in Ukraine.

This gasoline is sold, in particular, through a network of gas stations that operate under the brands Avias, Sentoza and ANP. There are more than 1000 of these throughout Ukraine. Earlier, it also included the Ukrnafta gas station network, but since 2015 Kolomoisky has no control over it. In addition, Kolomoisky also has several tank farms, in particular, Naftokhimik Prykarpattya, the former Nadvornyansky refinery.

However, one of Kolomoisky’s most valuable assets is Ukrnafta, the largest oil producing company in Ukraine. In 2018, the company produced almost 1.5 million tons of oil and more than 1 billion cubic meters of gas. Privat Group owns 42% of the shares here. The controlling stake is owned by the state via means of Naftogaz.

Up until 2015, Ukrnafta was managed by people controlled by Kolomoisky. According to Forbes magazine, Privat Group people received control of the company back in 2003, thanks to an agreement with Victor Pinchuk, the son-in-law of the then President Leonid Kuchma. Pinchuk then seemed obliged to assist in the appointment of the head of the board and 5 of the 11 members of the supervisory board, nominated by Kolomoisky and Bogolyubov. For this, the oligarchs had to transfer no less than $5 million monthly to a special fund that was allegedly dedicated to financing Kuchma’s election campaign. Overall, they transferred about $100 million. However, Kuchma did not go to the polls for the third time (back then there were proposals to adopt changes to the law so that one could run for the presidency more than twice- ed.). And although Kolomoisky and Bogolyubov tried to regain that money through the courts, the case "stalled”.

Former Prime Minister Yulia Tymoshenko also played in Kolomoisky’s favor. Before the 2010 elections, Tymoshenko made a PR move - she made Ukrnafta pay dividends to the state. But only in exchange for signing a special agreement, under which the state agreed that Ukrnafta would be permanently managed by Kolomoisky’s people.

In March 2015, parliament adopted a law according to which the quorum for holding a general meeting of shareholders in Ukraine was reduced from 60% to 50% + 1 share. As a result, Naftogaz was able to hold an Ukrnafta shareholders meeting without Privat and removed them from operational management.

Today, due to a number of operations that siphoned off money, Ukrnafta’s total tax debt amounts to almost UAH 11 billion ($417.3 million). Despite this, since 2015, Kolomoisky’s company, in a Stockholm court, has been demanding that Ukraine pay $4.7 billion due to the loss of dividends, fines, and because of the decline in the value of shares.


Another large segment that is controlled by Privat Group is the production of ferroalloys (iron alloys with various elements that are used in the manufacturing of special sorts of steel). Privat in Ukraine owns the entire production chain from ore mining (Ordzhonikidze and Marganetsk mining and processing plants) to the production of the alloys themselves - Nikopol and Zaporizhia ferroalloy plants. Another plant, in Stakhanov in the Luhansk region, hasn’t been operating since 2014, since it’s located on a non-government controlled part of Ukraine.

The total capacity of Nikopol and Zaporizhia plants is 1.8 million tons of ferroalloys per year, which is 89% of the total production of ferroalloys in Ukraine. The Stakhanov plant brought this figure to two million.

Kolomoisky and Bogolyubov’s partner in the ferroalloy business is Pinchuk. He owns 30% of each of the enterprises. At the same time, according to businessman Hennadiy Korban, Kolomoisky “practically controls the ferroalloy business himself,” and the product sales are carried out by the oligarch’s long-time business partner Martynov.

Dniproazot and Aviation

Kolomoisky controls several other assets in other industries.

For example, Dniproazot is one of the “big six” chemical plants in Ukraine, a producer of the chemical substance carbamide (also known as urea). Since 2011 the plant's property has been leased by Ukrnafta. Thanks to this combination, Dniproazot has long used Ukrnafta gas as a raw material for the production of fertilizers (ammonia and urea), which led to the leaching of money from the state-owned company. For example, in 2015, the plant made UAH 1 billion ($37.9 million) of net profit, while Ukrnafta had UAH 5.4 billion ($204 million) in losses.

In 2009, Privat Group began buying assets in the airline industry. In August of that year, the State Property Fund of Ukraine sold 94.5% of Dniproavia airline shares, which were bought by Kolomoisky’s company Haltera. In the same year, firms close to the Privat group bought a 25% stake in AeroSvit airlines, which later, in 2013, went bankrupt in favor of Privat. In September 2010, Kolomoisky acquired a charter airline Windrose.

In the summer of 2015, the oligarch admitted that he is the majority owner of Ukraine International Airlines. Previously, it belonged to Borys Kolesnikov, the infrastructure vice-premier of ex-President Viktor Yanukovych. Kolomoisky had acquired a share in it in 2012. The company is the largest air carrier in Ukraine.

Kolomoisky and Bogolyubov also have large minority stakes in the regional energy companies of Poltava, Chernihiv, Sumy and Khmelnytskyi, and own small stakes in Dniprooblenergo and Zaporizhiaoblenerho.

Privat’s port business is also significant: they manage the Boryvazh grain processing complex and the Odessa refining complex, as well as at least three stevedore companies (which carry out trading, processing and technical activities in ports), plus the Illichivsk Fuel Terminal.

Privat also has assets in the agricultural and food sector. Privat-AgroHolding is responsible for the agricultural sector with a land bank of 100,000 hectares. ShchedrŠ¾ TM represents the food segment - this includes Lviv, Kharkiv, Zaporizhia oil and fat plants, as well as Biola TM, which produces juices, water, and other carbonated drinks.

The oligarch also controls the Zhidachivskyi pulp-and-paper mill and Izmailskyi pulp-and-cardboard mill and Dnipro Plast, which produces semi-finished products for the manufacture of plastic bottles.

Media and Crimea Assets

Kolomoisky is the owner of "1+1 media" - a large television holding, which includes TV channels 1+1, 2+2, TET, PlusPlus and Ukraine Today. In addition, Kolomoisky’s media assets include the women's magazine Bigudi and the UNIAN news agency. Internet publication The Babel, is also funded by Privat structures, according to information from Hromadske’s market sources.

Kolomoisky and Privat Group also suffered significant losses from the annexation of Crimea. Russia "nationalized" 87 entities and the hotel and construction business, as well as a network of gas stations and a petroleum depot suffered. According to the decision of the Hague court, Russia must pay $159 million in compensation to the companies of Privat Group. Although Kolomoisky estimates his losses in Crimea to be at two billion dollars.

However, Kolomoisky has managed to retain a considerable tourist asset - the ski resort Bukovel.