Ferrexpo's Cash Storm: $90 Million in Frozen VAT and a Shareholder Veto Leave Just Months to Spare
23.05.2026 - 16:43:09 | boerse-global.de
The irony of Ferrexpo’s predicament is hard to miss. The Ukrainian iron ore miner has more than $100 million in non-binding interest from institutional investors for a capital raise, yet it cannot get the deal done. The stumbling blocks are familiar to anyone tracking the company’s long slide: a controlling shareholder unwilling to accept dilution and Western banks refusing to lend over compliance risks tied to major owner Kostyantyn Zhevago.
The result is a cash crunch so severe that the company expects its freely available net liquidity to run out around the end of August 2026, even after the recent sale of its transshipment vessel Iron Destiny for a net $7.7 million. That asset sale bought Ferrexpo roughly two extra months, but it does nothing to close the fundamental financing gap.
The VAT Freeze That Keeps on Biting
At the heart of the crisis sits a $90.3 million net receivable from Ukrainian value-added tax refunds that the tax authorities are refusing to pay. The government cites personal sanctions against Zhevago — sanctions Ferrexpo says are not directed at the company or its subsidiaries and which it considers unjustified. The funds remain blocked regardless.
This cash drain is devastating. Ferrexpo’s net cash position stood at just $20 million as of 17 April, down from $101 million at the end of 2024. The company has responded with a harsh austerity programme: cutting working hours, slashing purchases of goods and services, suspending social spending and halting non-essential investment.
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If the VAT refunds do not resume, the company warns it is “highly likely” that Ferrexpo or parts of the group would be forced into insolvency.
Production Plunges as Power Grid Is Hit
Operationally, the first quarter of 2026 was brutal. Russian strikes on Ukraine’s energy infrastructure forced widespread shutdowns. Iron ore output tumbled 72% year-on-year to 592,750 tonnes, and was down 45% from the previous quarter. Only a single pellet line is currently running, after a temporary production halt that began on 20 January.
Ferrexpo continues to export via its own fleet of railway wagons to customers in Eastern and Central Europe, but the logistics help does little to offset the plunge in volume.
A Shareholder Stalemate
The capital raise of at least $100 million remains the only stated solution for securing operations over the next 18 months. But the path is blocked on two fronts. Banks have denied new credit lines, citing strict anti-money-laundering rules and compliance exposures linked to Zhevago.
And on the equity side, the holding company Fevamotinico Sarl, which controls nearly half the shares, has repeatedly blocked capital-raising resolutions. At the 2025 AGM it scuppered a similar effort to avoid dilution. The most recent shareholder meeting on 21 May 2026 also failed to produce a breakthrough. Without board and shareholder approval, the conditions for the institutional interest cannot be met in time.
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Closing Window and a Court Fil
A further legal headache emerged in late February, when a court in Poltava opened insolvency proceedings for Ferrexpo’s main mining facility. The company now faces a formal restructuring deadline: with half-year results due in August, management must present a viable turnaround plan. Until then, auditors refuse to sign off on the 2025 annual report, which itself was due by 30 April.
That missing report is the immediate reason the shares remain suspended from trading on the London Stock Exchange — a freeze that began at 7:30 a.m. on 1 May. The last traded price, 28.58 pence on 19 May, marks a collapse from the 52-week high of 87.10 pence and is only a whisker above the low of 27.20 pence. Even before the suspension, average weekly volatility over the past three months ran at 17%.
Ferrexpo’s management has been unusually blunt about the stakes. If the planned financing falls through, they warn, “significant adverse consequences” could follow — including the total loss of value for existing shareholders. The company is living on borrowed time, and August is not far away.
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