Ferrexpo’s Share Price Dropped 10.1% on FPM Ukraine Debt Issues

The Ferrexpo Plc (LON: FXPO) share price dropped by 10.1% after the company acknowledged recent media conjectures regarding an application submitted by LLC PCC “Kysen” to initiate creditor protection proceedings against Ferrexpo Poltava Mining (“FPM”), a crucial supplier and associate of Ferrexpo in Ukraine. 

The application, which concerns a debt amounting to UAH 2.2 million (equivalent to approximately US$58,000) under a supply contract, has been officially accepted by the Commercial Court in Poltava Oblast. Following this, the court has slated a preliminary hearing for 12 March 2024 to deliberate whether to begin creditor protection proceedings for FPM.

Ferrexpo's Board has proactively taken measures to address and settle the outstanding debt in light of these developments. However, challenges have arisen due to operational restrictions on FPM's banking activities within Ukraine and the specific nature of the payment intended for debt settlement.

Consequently, FPM is unable to guarantee the prompt receipt of funds. FPM is concurrently pursuing negotiations to extend the payment deadline to mitigate this issue. Further complicating matters, FPM has been informed of a legal directive instigated by a Ukrainian prosecutor's request to freeze its bank accounts.

The directive is connected to an ongoing inquiry led by the National Police of Ukraine since November 2022, which investigates allegations of illegal mineral extraction (rubble). The investigation's details have been previously shared in the Group's 2023 Interim Results and its 2022 Annual Report.

In response to these multifaceted challenges, Ferrexpo is actively collaborating with its legal advisors and consultants to devise and implement strategies to navigate and resolve the current predicament. The company is committed to maintaining transparency and will provide updates as necessary. 

Despite these legal and financial hurdles, it is crucial to note that Ferrexpo's operational activities remain uninterrupted at this juncture. This communication includes privileged insider information and is being disseminated under the supervision of Mark Gregory, the Group's Company Secretary, who is responsible for the accuracy and timeliness of this announcement.

Ferrexpo share price. 

The Ferrexpo share price dropped 10.07% to trade at 63.20p from Friday’s closing price of 70.28p.