Ferrexpo Caught Between ETF Hopes and a $17 Million Cash Crunch

Ferrexpo faces a liquidity crisis with only $17M cash, LSE suspension, and 72% production drop; legal battles and war impact mount despite Ukraine ETF inclusion.

Ferrexpo presents a study in contradictions. The iron ore group has been added to a Ukraine reconstruction exchange-traded fund, yet its own shares remain suspended on the London Stock Exchange and its cash pile has shrunk to just $17 million. This disconnect between long-term potential and immediate distress defines a situation that is becoming increasingly precarious by the week.

The liquidity crisis is the most pressing issue. At mid-April, Ferrexpo held only $17 million in freely available cash, down from over $100 million at the end of 2024. The drain was accelerated by an inability to file audited 2025 financial statements — auditors refused to sign off on a going-concern basis without a secured financing solution. Trading on the LSE was suspended on 1 May. To conserve cash, the company sold one of its transport vessels, while additional funds remain trapped in Switzerland at the MBaer Merchant Bank, which is undergoing its own liquidation.

Compounding the cash crunch, Ukrainian authorities are withholding roughly $90 million in VAT refunds, a move that further tightens the vice. The board has warned that without a successful capital injection, available liquidity will stretch only until approximately the end of August 2026. If the VAT money remains frozen and the capital raise fails, the timeline becomes far shorter — insolvency could loom as soon as the end of this August.

Legal Battles on Multiple Fronts

Ferrexpo is fighting on several legal fronts simultaneously. A Ukrainian court has opened insolvency proceedings against its subsidiary Poltava Mining and appointed an administrator; the group has immediately appealed. Separate proceedings target the nationalisation of nearly half of Poltava Mining’s assets. Most recently, the authorities revoked the exploration licence for the Galeschynske deposit north of Ferrexpo’s active mines. While the associated costs were written off years ago, the loss of those rights is a serious blow to long-term resource planning.

There are also corporate governance clouds. A Kyiv court in late April approved pre-trial investigations into the former CEO and majority shareholder, Kostyantyn Zhevago, on suspicion of embezzlement. Such allegations further erode the trust of potential investors at a time when the company is desperate for fresh funds.

Production Ravaged by War

Operationally, the war has been devastating. First-quarter iron ore production collapsed by 72% year-on-year to 592,750 tonnes, and by 45% compared with the previous quarter. Russian attacks on Ukraine’s energy infrastructure forced production to halt for extended periods; only a limited resumption began in late February. Today just a single pellet plant is running. A temporary ceasefire between Russia and Ukraine, agreed for 9–11 May with a prisoner exchange, has raised some hope of de-escalation. US President Donald Trump called it a possible beginning of the end of the war, but a three-day pause does little to restore the energy grid or revive output.

Financing Hinges on a $100 Million Question

The board sees a capital increase as the only viable path forward. Institutional investors have expressed non-binding interest exceeding $100 million, but the attached conditions have yet to be met within the required timeframe. The largest shareholder, Fevamotinico, which holds 49.3%, supports the plan on two conditions: a pro-rata participation and a cap on the total volume at $100 million. The company must present concrete results at the board meeting scheduled for 21 May.

ETF Inclusion: A Symbolic Boost?

Against this backdrop, the HANetf Ukraine Reconstruction UCITS ETF has added Ferrexpo alongside drone-software provider Swarmer and telecoms group Kyivstar. HANetf insists the inclusion is purely rule-based, not a discretionary decision, and that diversification within the fund limits single-name risk. But for Ferrexpo, the move changes little in the near term: while the shares remain suspended, an ETF position is more a nod to long-term potential than a source of immediate liquidity. With reconstruction costs already estimated at more than €420 billion, the thematic fit is clear — but survival comes first. The next tangible milestones remain the financing deal, the audited annual report, and a possible restoration of trading in London. Until then, the stock remains a bet on a future that may not arrive in time.