The Ukraine government hopes the sale will calm investor jitters and attract foreign investment.

Mittal was declared the winner of the 93.02% stake of Ukraine's largest steelworks on Monday after engaging in a bidding war with a consortium led by France's Arcelor in an auction televised live on two national channels.

President Viktor Yushchenko, for whom the sale was a key test of his government's avowed commitment to transparency and free market, hailed the result, saying the sale price exceeded by 20% all privatisation proceeds in post-Soviet Ukraine.

"What happened today shows that Ukraine is capable of holding an honest privatisation," Yushchenko, who was present in the building where the auction took place though he did not attend the sale itself, said in televised comments.

Changed climate

At Yushchenko's side, a jubilant Prime Minister Yury Yekhanurov echoed the sentiment.

Kryvorizhstal mill, which netted
$4.8 billion at Monday's auction

"International investors today have felt that the climate in Ukraine has changed," he said.

The winning price far exceeded expectations that the plant would be sold for slightly higher than $three billion.

"It was a huge sum ... a fantastic sum," a beaming Dmytro Parfenenko, deputy head of the State Property Fund who oversaw Monday's auction, said afterwards.

After the sale, Yushchenko met Lakshmi Mittal, the Indian-born British billionaire whose family owns Mittal Steel and who attended the auction.

High stakes

The stakes of Monday's highly scrutinised sale for Yushchenko and his team were high.

Kryvorizhstal was initially privatised last year in a contest that saw the nation's largest steelworks sold to two top insiders of the former government for $800 million.

"What happened today shows that Ukraine is capable of holding an honest privatization"

Viktor Yushchenko,
Ukraine President

The sale became a symbol of the corruption and cronyism that was rampant under former president Leonid Kuchma, and Yushchenko vowed to review the auction after he assumed power earlier in the year in what has become known as the Orange Revolution.

A court in April ruled last year's auction unlawful and ordered the stake returned to the government.