Ferrexpo's $100 Million Rescue Hinges on September 21 Vote as $788 Million Tax Bill Looms

Ferrexpo asks shareholders to back a $100 million recapitalization on September 21 while a $788 million tax claim hangs over its Ukrainian unit.

Ferrexpo is racing to close a roughly $100 million recapitalization while a tax dispute worth about $788 million hangs over its Ukrainian subsidiary, leaving shareholders to weigh a lifeline against a liability that could still upend the balance sheet.

The London-listed iron ore pellet producer has set its general meeting for September 21 in the British capital, where investors will vote on the capital raise and a package of corporate governance items. If approved, the new shares are slated to begin trading on the London Stock Exchange the following day, September 22.

Placement Priced at a Deep Discount

Ferrexpo announced the placement of new shares on September 4, targeting approximately $100 million at an issue price of 16.5 pence per share. That marks a discount of about 42.3 percent to the last closing price before trading was suspended on April 30.

Cornerstone investor Andriy Verevskyi, owner of the agricultural group Kernel, has committed $50 million and is set to hold roughly 21.4 percent of the share capital. Majority shareholder Fevamotinico S.à r.l., which controlled 49.27 percent of voting rights before the raise, is subscribing for shares worth about $40 million.

The transaction remains formally conditional on shareholder approval at the September 21 meeting, meaning the recapitalization is not yet legally complete.

Bridge Loan Carries Conversion Clause

Until the vote clears, an unsecured loan of $15 million from Fevamotinico — received in early September — is covering Ferrexpo's immediate liquidity needs. The facility carries an interest rate of 9.75 percent per year and a term of twelve months.

The terms contain a sharp edge. Should the general meeting fail to approve the capital increase or the placement agreement collapse, Ferrexpo can repay the loan by issuing new ordinary shares at the issue price. That would deepen dilution for existing holders precisely when the broader recapitalization stalls. Fevamotinico's grip would tighten further in such a scenario, underscoring how much the September 21 vote matters for the company's power balance.

Separately, Ferrexpo is negotiating a secured trade finance facility of up to $30 million at 12 percent interest over three years, maturing in September 2029. Repayment would come primarily through deductions from product delivery proceeds, with collateral limited to assets outside Ukraine — a structure that lays bare how heavily international lenders now price in the country risk.

Ukrainian Authorities Press a $788 Million Claim

Alongside the financing squeeze sits a tax demand from Ukrainian authorities against subsidiary Ferrexpo Poltava Mining, equivalent to roughly $788 million. The claim, amounting to about 35.3 billion hryvnia, followed an unscheduled document review in which tax officials said they found violations of foreign exchange control rules for periods between July 2021 and the end of 2025. Ferrexpo has formally contested the assessment and maintains the liabilities are neither confirmed nor enforceable while administrative and judicial reviews proceed.

The dispute overlaps with insolvency proceedings involving the Poltava Mining and Processing Plant. The Kharkiv Court of Appeal rejected a challenge to the opening of insolvency proceedings in August, prompting the company to file a cassation appeal with the Supreme Court on August 21.

Cash Burn Forced the Company's Hand

The urgency stems from a rapidly thinning balance sheet. Net liquidity fell from $47 million at the end of 2025 to $25 million at the end of March and to about $21 million as of June 30. Without fresh capital, available funds would have run dry by mid-September.

Operational pressures compounded the squeeze. Ferrexpo halted production during the summer amid the tense security situation around Ukrainian port facilities and blocked export logistics across the Black Sea. Restarting operations required fresh working capital — the very capital the company is now raising.

The financial backdrop for 2025 was already weak: revenue fell 16 percent to $787 million, while adjusted EBITDA collapsed 60 percent to $28 million. For 2026, the company said it could not provide a reliable production and cost forecast, a reflection of the uncertainty stemming from both the war and unresolved proceedings such as the tax dispute.

Pellet production has since resumed on one line following the emergency financing, with the company focusing on European customers given continued attacks on ports and vessels in the Black Sea. Even so, the legal and tax risks in Ukraine remain unresolved and look set to weigh on the company's valuation for some time.