Ferrexpo's Core Asset Under Siege: ARMA’s Seizure Bid Adds Urgency to a $100 Million Rescue

Ferrexpo scrambles to raise $100M before cash runs out by August as a Kyiv court weighs seizing nearly half of its main subsidiary, with shares suspended and VAT refunds blocked over sanctions.

Ferrexpo is staring down a pair of existential threats that are converging fast. This week, a Kyiv court will hear the state’s bid to seize nearly half of its main Ukrainian subsidiary, while the miner scrambles to secure a $100 million capital injection before its cash pile vanishes by late summer.

The company’s liquidity has been draining at an alarming rate. Cash balances slid from $101 million in December 2024 to just $20 million by mid-April 2026. The recent sale of the vessel Iron Destiny for $7.7 million net has bought only a few months of breathing room, with management estimating the group can survive until the end of August at the current burn rate. That makes the planned equity offering of at least $100 million the only viable bridge.

But the capital increase comes with strings attached. While Ferrexpo has received expressions of interest exceeding the $100 million target, the conditions attached are not yet met within the necessary timeframe. Majority shareholder Fevamotinico, which holds 49.32% of the ordinary shares and is linked to sanctioned Ukrainian businessman Kostiantyn Zhevago, has indicated it will participate pro rata — but only if the total raise does not exceed $100 million. The new shares are earmarked for institutional investors, subject to board approval, market conditions, and shareholder ratification.

Bank financing is off the table. Lenders are refusing credit lines over sanctions concerns tied to Zhevago, anti-money laundering requirements, and existing seizure orders on group assets, including shares in Ferrexpo AG and Ukrainian subsidiaries. The insolvency proceedings already under way at Ferrexpo Poltava Mining effectively block any secured debt financing on acceptable terms.

The cash squeeze is compounded by a blocked VAT refund. The Ukrainian tax authority has withheld $69.4 million of the $90.3 million in outstanding input VAT claims, citing Article 200.4 of the tax code, which prohibits repayments to entities whose beneficial owners are sanctioned. Zhevago is the beneficiary of the Minco Trust, which controls the bulk of the equity. Even when courts have ruled in Ferrexpo’s favour, the funds remain stuck with the State Treasury, awaiting enforcement.

On the operational front, the company is running at a fraction of its pre-war capacity. Just one of four pelletising lines is active, with output plunging 72.1% year-on-year in the first quarter of 2026 to 592,751 tonnes. Staff in Ukraine have been placed on reduced hours or short-time work.

Trading in Ferrexpo’s shares has been suspended on the London Stock Exchange since the start of May, after the company missed the 30 April deadline for its 2025 annual report. Auditors refuse to sign off without a going-concern opinion, which in turn hinges on the successful completion of the capital raise. No date has been set for the resumption of trading.

The legal threat adds a fresh dimension. The Asset Recovery and Management Agency (ARMA) is seeking to seize roughly 49.3% of Ferrexpo Poltava Mining, the group’s core subsidiary, before the Pechersk District Court in Kyiv. The charge is illegal extraction of mineral resources — a claim Ferrexpo flatly denies, arguing all licences are valid. The company has warned that a transfer of rights to ARMA would breach international investment treaties between Ukraine and both the UK and Switzerland, and has announced plans to launch international arbitration.

The Ukrainian parliament’s economic committee has set up a working group to address operational challenges facing mining companies, with Poltava Mining at the top of the agenda. The first meeting included representatives from the economy ministry, the central bank, the justice ministry, the tax service, and industry associations. Yet the outcome remains uncertain.

If the $100 million capital raise fails, the company’s cash runway ends in August, spelling a likely default and total loss for shareholders. Until then, all eyes are on the Kyiv courtroom and the investor roadshow — two timelines that will determine whether Ferrexpo can keep its head above water.