Russian mining and metallurgical group of companies Mechel ceased to take into account the assets of Donetsk electrometallurgical plant in the consolidated financial statements in connection with his capture by Pro-Russian fighters and their full depreciation UAprom reports, citing data from annual financial reports of the company.
25 June 2016 on the basis of the property complex of a subsidiary of the group DEMZ order of the leaders of the Pro-Russian fighters were created the so-called enterprise yuzovsky metallurgical plant.
“This has limited the ability of Mechel to manage the assets of the property complex of DEMZ and to exercise control over them”, – stated in the annual financial statements of the company.
Therefore, Mechel came to the conclusion that the assets within the property complex DEMZ do not meet the recognition criteria and derecognised the relevant assets in the consolidated financial statements.
“The results of the test for impairment as at 1 January 2014 and 31 December 2014 assets DEMZ was fully impaired in connection with the cessation of production in 2013 Loss of control over assets with zero book value has no impact on the financial results for the year ended 31 December 2016”, – the document says.
However, Mechel continued to make monthly payments for the purchase of 22 December 2011 100% shares of Daveze Ltd, which owns 100% of the capital of DEMZ. Total cash consideration of $537 ml shall be paid in monthly installments during the period from December 2011 to December 2018.
Recall that in 2013, Mechel announced its intention to sell Donetsk electrometallurgical plant.