Ukraine's lower court opens bankruptcy proceedings against Poltava Mining – Ferrexpo

The Commercial Court of Poltava Region has accepted for consideration an application filed by Financial Company Maxi Capital Group LLC to open bankruptcy proceedings against PJSC Poltava Mining and Processing Plant (FPM, Komsomolsk, Poltava region).

According to a statement by Ferrexpo, Maxi Capital filed such application on May 9, 2025, in connection with the contested sureties claim. The court accepted the application for consideration on May 14, 2025, and scheduled a preparatory hearing for May 27, 2025, which was rescheduled several times by the judge.

"Today, the company regrets to announce that a local court of first instance in Ukraine ruled to open bankruptcy proceedings against FPM. As part of this ruling, the court has appointed an insolvency manager," the press release states.

The legal dispute over the contested sureties between Poltava Mining and Maxi Capital Group under review by the Supreme Court of Ukraine. Therefore, the local court in Poltava opened bankruptcy proceedings without a final ruling by the Supreme Court on the main litigation and notwithstanding the decision of the Supreme Court dated April 1, 2024, to suspend possible enforcement against Poltava Mining, the Ferrexpo statement says.

The statement further notes that following the official publication of the bankruptcy announcement, the insolvency manager will start compiling a list of creditor claims in accordance with the relevant Ukrainian regulations.

"The existing FPM management team will remain in place and continue to operate the business during this period. FPM will file an appeal against the court's ruling within the statutory 10-day period. However, the filing of an appeal does not suspend the ongoing bankruptcy proceedings," the statement emphasizes.

The company draws attention to the fact that not possible to assess the potential impact of such bankruptcy proceedings and their timing, as these depend on further court proceedings, which may extend over a considerable period of time. The company will continue to assess this development and will make further announcements as and when appropriate.

On December 7, 2022, Poltava Mining received a claim from Maxi Capital in the amount of UAH 4.727 billion in relation to the disputed surety obligations, under which Maxi Capital asserts that Poltava Mining guaranteed the fulfillment of obligations of Finance and Credit Bank under certain loan agreements. Finance and Credit Bank is in the process of liquidation after the National Bank of Ukraine declared it insolvent and introduced a temporary administration on September 18, 2015.

On December 7, 2022, Poltava Mining received a claim from Maxi Capital in the amount of UAH 4.727 billion regarding the contested surety obligations, under which Maxi Capital claims that Poltava Mining guaranteed the bank’s obligations under certain credit agreements.

As previously reported by Ferrexpo, on January 26, 2024, the Ukrainian appellate court upheld the claim against Poltava Mining in the amount of UAH 4.727 billion. On January 30, 2024, Poltava Mining filed an appeal with the Supreme Court of Ukraine, and on April 1, 2024, the Supreme Court suspended potential enforcement of the appellate court’s decision. Accordingly, Maxi Capital cannot initiate enforcement proceedings until a final decision by the Supreme Court or the lifting of the Supreme Court’s suspension order, the company believes. It also notes that management previously considered the claim to be without merit. The Group recognized a full provision of UAH 4.727 billion in its financial statements for the 2023 financial year, and this provision was maintained in the financial statements for the 2024 financial year and in the interim results for the six months ended June 30, 2025.

Ferrexpo is an iron ore company with assets in Ukraine. Ferrexpo owns 100% of PJSC Poltava Mining, 100% of Yeristovo Mining LLC, and 99.9% of Belanovo Mining.