Ferrexpo Sells Iron Destiny Vessel for $7.7 Million as $100 Million Rescue Hangs in the Balance

Ukrainian iron ore miner Ferrexpo has months of liquidity left, needs $100M rights issue, and battles a $90M VAT freeze as LSE suspension continues.

The clock is ticking for Ferrexpo. The Ukrainian iron ore producer, whose shares were suspended from trading on the London Stock Exchange on May 1, has just months of liquidity left — and a complex web of financial, operational and regulatory hurdles to clear before it can secure a lifeline.

Management has been scrambling to keep the lights on. In the latest emergency measure, the company offloaded its bulk carrier, the Iron Destiny, netting $7.7 million. That sale buys breathing room, but only just. Without a more substantial injection of capital, the group’s cash runway runs out by the end of August.

A $90 Million VAT Dispute Complicates the Picture

One of the most stubborn obstacles to Ferrexpo’s survival sits inside its own balance sheet. Ukrainian tax authorities are withholding value-added tax refunds worth more than $90 million. The reason is personal sanctions against Kostiantyn Zhevago, the company’s former majority owner. Ferrexpo itself is not sanctioned, but the state has frozen the payments regardless, leaving the miner unable to access a significant source of working capital.

That impasse has compounded the damage from Russia’s sustained attacks on Ukraine’s energy grid. Production collapsed in the first quarter, with output plunging 72% year-on-year to just 593,000 tonnes. Only one of the company’s four pelletising lines is currently operational. Staff have been furloughed or put on reduced hours, and all capital expenditure and maintenance programmes have been halted.

The $100 Million Capital Raise That Could Save — or Sink — the Company

Ferrexpo’s board has concluded that a rights issue of at least $100 million is the only viable path to keep the business afloat for the next 18 months. Institutional investors have expressed non-binding interest, and the largest shareholder, Fevamotinico, which controls roughly half the equity, has indicated it will participate — provided the deal is capped at that $100 million target and structured as a pro-rata offering.

But the clock is working against management. The trading suspension was triggered by the failure to publish audited 2025 financial results by the April 30 deadline. The auditor refused to sign off without a going-concern opinion, which in turn depended on securing the recapitalisation. The suspension will remain in place until the accounts are filed and the funding is locked in.

Analyst Caution and a Race Against Time

Panmure Liberum has responded to the uncertainty by pulling its forecasts and placing the stock under review. The broker noted that the near-term financing outlook remains too opaque to support any reliable projections.

Ferrexpo’s predicament is now a race against three simultaneous deadlines: the August cash crunch, the need to finalise the capital increase, and the requirement to produce audited accounts. The company has warned that failure to secure the $100 million injection could lead to insolvency. For now, the Iron Destiny sale has bought a few more weeks — but the real test lies in whether the institutional support turns from expressions of interest into hard commitments.