Key facts
- Ferrexpo will resume trading on the London Stock Exchange on September 7.
- The company raised a total of $100 million in new funding.
- Ukrainian oligarch Andrii Verevskyi provided $50 million of the investment.
- Fevamotinico, owned by oligarch Kostyantyn Zhevago, committed nearly $30 million.
- The investment aims to alleviate financial difficulties and secure jobs.
Ferrexpo, a significant Ukrainian iron ore producer, is set to resume trading on the London Stock Exchange (LSE) on September 7, following a crucial $100 million funding round. The lifeline comes primarily from Ukrainian oligarch Andrii Verevskyi, owner of the agricultural firm Kernel, who injected $50 million by purchasing new shares at $0.165 each. Fevamotinico, the company's largest shareholder and linked to oligarch Kostyantyn Zhevago, contributed nearly $30 million.
The company had faced severe financial distress, with financing only expected to last until mid-September, and had struggled for months to secure the necessary capital. Ferrexpo's suspension from the LSE on May 1, due to delays in publishing audited financial results, further complicated its situation. The newly raised funds are expected to enable the company to resume exports, restart postponed spending, and potentially increase production as conditions in Ukraine improve.
Ferrexpo's board welcomed the investment, highlighting its importance for securing thousands of jobs and supporting local communities and the broader Ukrainian economy. The company and other players in Ukraine's mining sector have voiced concerns about unfair treatment by the government, which they believe deters foreign investment. These issues are partly linked to Zhevago, who faces embezzlement and bribery charges and was arrested in France in late 2022. Ferrexpo has attempted to distance itself from Zhevago, noting his minority stake, with international investors like BlackRock holding the remainder. However, government sanctions on Zhevago led to the suspension of VAT refunds, totaling around $100 million, forcing the company to cut staff and operations. Additionally, recent Russian attacks on Black Sea ports have halted maritime exports, Ferrexpo's primary export route, while high electricity costs and power outages in Ukraine have further hampered operations.