Existing investors are prepared to provide Ferrexpo with a $100m lifeline, and institutional investors have expressed more than $100m in non-binding interest, Ferrexpo said, as it warned it could run out of cash by end of August. The company said the intended fundraise is the only viable solution to meet obligations and provide working capital for the next 18 months.
Ferrexpo plans to issue new shares to raise cash, the company said. The company said the timeline for the scheme will delay publication of annual accounts, breaching Stock Exchange rules, and shares are expected to be suspended from 1 May. Main existing investor Fevamotinico, which holds over 49%, will take part in the equity fundraising, the company said.
The intended fundraise is currently the only viable solution in the timeframe required to meet the group’s ongoing obligations and provide sufficient working capital for the group’s short-term operational requirements while operating at a reduced level for the next 18 months and to continue as a going concern.
Ferrexpo's market value peaked at around £3bn with shares over 480p in 2021, but on Tuesday they rose 4% to just 33.7p, market data showed. The company has reported significant disruption from Russia's war on Ukraine since 2022, including energy outages, supply disruptions, and challenges getting output to market. It says it is one of the biggest employers in central Ukraine with about 10,000 staff and contractors.
Fevamotinico is an investment vehicle linked to Ukrainian oligarch and former MP Kostiantyn Zhevago, according to company filings. Zhevago has faced legal action over the 2015 collapse of Finance & Credit Bank; he denies wrongdoing. According to reports, a French court in 2023 refused an extradition request to Ukraine over embezzlement accusations, following his arrest at a ski resort. When the bank failed, Ferrexpo had around $174m deposited, roughly 60% of its cash, the company disclosed at the time. Ukraine's government views Zhevago as the ultimate beneficial owner of Ferrexpo. Kyiv suspended VAT rebates worth around $12m in 2024, which the company said strained its liquidity.
The company has received indicative, non-binding expressions of interest to participate in the intended fundraise from institutional investors, which, in aggregate, are in excess of $100m, conditional on certain terms and conditions