Ferrexpo’s June AGM: A Governance Vacuum as $100 Million Rescue Fails and Cash Ebbs Away

Ferrexpo's $100 million capital raising collapse forces going-concern issues; cash only until August, production halted, and trading suspended amid Ukrainian sanctions and VAT refund disputes.

When Ferrexpo’s shareholders gather in London on 29 June, they will face an agenda stripped of almost everything that matters. The iron ore pellet producer has been forced to omit the annual report, the appointment of an auditor and the directors’ remuneration from the meeting because the 2025 accounts cannot be completed on a going-concern basis. The culprit is not an operational mishap but a collapsed $100 million capital raising that has left the company’s finances in limbo.

The capital increase fell apart after institutional investors who had expressed non-binding interest for more than $100 million could not meet the terms within the required timeframe. Fevamotinico, the dominant shareholder with a 49.32 per cent stake, has pledged its support but only on condition that it is allowed to participate proportionally and that the total does not breach the $100 million ceiling. Even with that backing, banks and financial institutions have refused to provide financing, citing concerns over Ukrainian sanctions regulations, anti-money laundering rules and know-your-customer requirements.

That funding freeze has direct consequences for the balance sheet. At the end of March, Ferrexpo held $35 million in cash, with net liquidity standing at roughly $25 million. Strip out the funds tied up at MBaer Merchant Bank, and the freely available balance shrinks to just $22 million. The company has sold the transhipment vessel Iron Destiny for a net $7.7 million, an injection that extends the cash runway to around the end of August. Without it, liquidity would have run dry by the close of June.

Adding to the strain is a protracted dispute over Ukrainian value?added tax refunds. The blocked amount, which was forecast to hit $80 million by the end of March, has since swelled to $90.3 million. Under Article 200.4 of the Ukrainian tax code, refunds cannot be paid to companies whose ultimate beneficial ownership structure includes sanctioned individuals. Even court rulings in Ferrexpo’s favour have failed to release the funds, which sit idle at the state treasury.

On the operational front, the company is running on a skeleton crew. Production was halted in January after attacks on Ukraine’s energy infrastructure, and only a single pellet line has been operating since February. Ferrexpo has cut working hours, reduced procurement of goods and services, and halted all non?essential capital expenditure and social spending. The output constraints mean that even if a financing solution is found, restoring full capacity will take time.

The trading suspension that began on 1 May remains in place, with the last quoted price stuck at 28.58 pence. Over the past twelve months the shares have swung between 27.20 pence and 87.10 pence, leaving the stock down 31.15 per cent on the year and underperforming the FTSE All Share by 39.52 percentage points. That price freeze reflects not merely the operational disruption but the market’s uncertainty over whether the company can secure fresh capital in time.

The 29 June meeting will therefore be a procedural affair. Shareholders are asked to re?elect four directors — Stuart Brown, Nikolai Kladiev, Lucio Genovese and Fiona Macaulay — while Vitalii Lisovenko, who has served on the board for more than nine years, will step down at the end of the meeting. The agenda also includes the renewal of authority to buy back shares on the open market and a resolution allowing future meetings to be called on 14 full days’ notice. A separate extraordinary meeting is planned for later, once the audited accounts are published, to address the auditor appointment and director pay.

For now, the company’s immediate future hinges on completing a financing round. Only then can the 2025 accounts be signed off and the trading halt lifted. The 29 June AGM provides a formal deadline, but the real countdown is to August, when the cash pile — even after the ship sale — will be exhausted. Without a rescue, the board’s limited mandate may be the least of Ferrexpo’s worries.