Ferrexpo Faces Severe Cash Crunch as Liquidity Dwindles

Ferrexpo warns cash may run out by mid-2026, triggering a stock sell-off. Ukraine blocks $80M in VAT refunds, forcing the firm to consider a dilutive equity raise.

The iron ore pellet producer Ferrexpo is confronting acute financial pressures on multiple fronts. A stark warning about evaporating cash reserves and the looming threat of a new share issuance have triggered a sell-off in the company's stock. With available funds now projected to last only a few more months, the Ukrainian state continues to block millions in crucial tax refunds, compounding the crisis.

Investor Flight and Share Price Plunge

The immediate catalyst for the severe decline in Ferrexpo's share price was a candid update on its treasury position. Company management now estimates that its available liquidity will only be sufficient to meet needs until at least the end of June 2026. As of the end of March, total liquidity stood at $35 million, a marked drop from the $47 million reported at the close of 2025. Furthermore, with funds blocked at MBaer Merchant Bank, only $22 million of that total is freely accessible.

Investors reacted forcefully to this outlook. On Thursday, the stock tumbled to a new 52-week low of 36.50 pence. This followed a drop of over eleven percent the previous day, a session that saw trading volume surge to more than 900 percent above the daily average.

In response to the operational funding shortfall, the firm is evaluating various financing options. A potential equity raise is under consideration, a move that would dilute the value of existing shares. The company has explicitly stated there is no guarantee that such financing will be successfully secured.

Operational and Political Headwinds Intensify

Ferrexpo's financial strain is exacerbated by an ongoing political dispute. The Ukrainian government is withholding value-added tax (VAT) refunds, which are estimated to have reached approximately $80 million by the end of March. This blockage, in place since the start of 2025, stems from personal sanctions against the company's majority shareholder. Ferrexpo has warned of material adverse consequences for the entire group if this deadlock is not resolved in time.

On the operational front, production is running at a reduced rate following war-related disruptions to energy infrastructure in January. Currently, only a single pelletizing line is active. The company has implemented strict cost-cutting measures related to working hours, procurement, and capital expenditures in an effort to conserve cash.

Key Dates for Clarity

The coming weeks will provide two critical updates on the company's financial stability. Ferrexpo is scheduled to publish its operational results for the first quarter of 2026 on April 14. This will be followed by the delayed publication of its full-year 2025 financial report no later than April 30. Market participants will scrutinize these releases for any progress on the planned capital raising initiative and for developments regarding the frozen tax funds.