Shareholders of mining company Ferrexpo, whose main assets are located in Ukraine, on Monday approved an additional share issue worth approximately $100 million, about $50 million of which will be provided by Kernel agricultural holding owner Andriy Verevsky and another approximately $40 million by Fevamotinico S.a.r.l., associated with Kostiantyn Zhevago and currently Ferrexpo's largest shareholder with a 49.27% stake.
According to a company statement, between 99.57% and 99.72% of votes were cast in favor of the three resolutions required.
The shares are being placed at 16.5 pence each, 42.3% below the share price on the London Stock Exchange on April 30 this year.
The new shares account for approximately 73.1% of the company's existing shares before the fundraising. Following completion of the fundraising, the owner of Kernel is expected to hold 21.44% of the enlarged share capital.
Ferrexpo shares on the London Stock Exchange fell 1.29% from the start of trading on Monday to 27.452 pence, corresponding to a market capitalization of GBP 166.76 million (about $223 million). The new shares will be admitted to trading on the exchange from September 22.
The company clarified that following admission to trading, its total issued share capital will comprise 1 billion 62 million 816,440 ordinary shares, each carrying one vote, but 15 million 830,814 shares are currently held in treasury and therefore carry no voting rights.
Ferrexpo also recalled that on September 8 it entered into an agreement with Fevamotinico for a $15 million unsecured credit facility, which represents an early repayment of part of the amount Fevamotinico committed to contribute as part of the recapitalization.
Ferrexpo announced the recapitalization agreement on September 3-4 this year. As of August 28, the company's cash position had fallen to approximately $26.4 million, or approximately $17.8 million after lease liabilities, compared with $21 million in the middle of this year and $47 million at the start of the year, which was sufficient to fund the company's operations only until approximately the end of October.
The board of directors believes the $100 million raised will be sufficient to meet the group's immediate and short-term operating needs, allowing it to operate at a reduced level over the next 18 months. The funds will be used primarily to restart temporarily suspended mining and processing operations in Ukraine, resume deferred spending across all operations, including repairs and maintenance, and maintain financial flexibility amid continued uncertainty over operations in Ukraine.
For the recapitalization, the board held negotiations with Fevamotinico, which opposed excessive dilution of its stake below 45.2% of the share capital, although this would have reduced Ferrexpo's risks associated with its links to Zhevago, who is under Ukrainian sanctions. The largest shareholder also stipulated that following the recapitalization, no one other than Verevsky would hold a stake of more than 15%.
As for Verevsky, his condition as an anchor investor was that Ferrexpo abandon any alternative fundraising through an equity or other transaction.
The placing was conducted through an accelerated bookbuilding process, with Panmure Liberum Limited and Peel Hunt LLP acting as joint global coordinators and bookrunners.
Later, BlackRock, Inc. reported that as of September 14 it and its affiliates had a combined 5% of the voting rights in Ferrexpo, of which 1.34% were held directly through shares and another 3.66% through financial instruments.
Despite current restrictions and risks, which are detailed in more than 40 pages of the documents, much of them related to sanctions against Zhevago, the bankruptcy proceedings involving the company's key asset, Poltava Mining and Processing Plant (PGOK), and claims by law enforcement and tax authorities, the board believes Ferrexpo retains significant potential for long-term recovery.
It was emphasized that successful completion of the fundraising and resolution of liquidity problems would give Ferrexpo additional time to focus its efforts on resolving problems in Ukraine, including continuing dialogue with the relevant authorities, in particular on the resumption of VAT refunds, which have accumulated to $88 million and the funds from which will be used by the Poltava and Yeristovo mining and processing plants in Ukraine.
The company also announced the resumption of operations at Poltava Mining and Processing Plant following a one-month shutdown.
Before announcing the recapitalization, Ferrexpo published its 2025 financial statements with a significant delay. According to the statements, the company reduced revenue by 16% to $787 million, EBITDA fell 2.5-fold to $28 million, while net loss increased almost 4.5-fold to $223.9 million.
Pellet production last year fell 47% to 3.22 million tonnes, while concentrate production increased 4.1-fold to 2.92 million tonnes. In January-June this year, Ferrexpo produced 1.39 million tonnes of pellets, down 36% year-on-year.
It was also reported that Ferrexpo would hold general meetings of shareholders on September 21 and October 9 this year to review its 2025 results. Ferrexpo plc called the meetings to consider certain standard resolutions normally put to shareholders at the company's annual general meeting, which was held on June 29, 2026. However, additional time was required to finalize the group's financial results for the year ended December 31, 2025, as a relevant financing decision needed to prepare the financial statements on a going-concern basis was expected to be implemented.
Ferrexpo owns 100% of Yeristovo Mining and Processing Plant LLC, 99.9% of Bilanovo Mining and Processing Plant LLC and 100% of shares in Poltava Mining and Processing Plant PrJSC.
The London Stock Exchange suspended trading in Ferrexpo shares from early May because the company was unable to publish its annual financial statements on time and resumed trading on September 7.
