Ferrexpo bullish on production output despite mounting legal actions
London-listed miner Ferrexpo has claimed it has hit a two-year production high and a stable war chest despite the ongoing war in Ukraine and legal action against it for over $100m (£79m).
In a statement to the markets today, the iron ore firm said production from its Ferrexpo Poltava Mining (FPM) operations in Ukraine was the highest since Russia invaded the country in 2022 and that it was continuing to “learn and adapt to overcome” the challenges the conflict presents.
However, the miner is facing increasing pressure as a result of several significant legal actions being pursued against it. Last month the actions forced the cancellation of its dividend and postponement of its annual results.
The most significant of these is a $130m (£120m) lawsuit looking to reclaim money allegedly owed by Ferrexpo Poltava Mining on behalf of a previous company run by Ferrexpo’s former chief executive and still largest shareholder, Ukrainian billionaire Konstantyin Zhevago.
The unnamed firm pursuing the claim are seeking debt repayment from Finance Bank and Credit, which collapsed into insolvency in 2015.
The company today said that the judge in the case recused himself on 20th March and as a result, proceedings have been pushed back to a new, as yet unconfirmed, court date.
In a separate claim against the company for unpaid debts brought by Kysen, a supplier firm for FPM, a preparatory hearing has been scheduled for next month, and the claim amount has been upped to $115,000 (£90,000).
“Whilst FPM continues to contest the separate sureties claim mentioned below, the group has sufficient financial resources to continue operating, including to settle the Kysen debt,” the company said.
“Under the terms of the restrictions on the operation of FPM’s bank accounts in Ukraine, FPM is permitted to pay salaries, taxes and energy suppliers from its accounts, however, payment to other suppliers is not permitted.”
To address these restrictions, FPM said it has entered into separate arrangements with the majority of its key creditors and suppliers to change payment obligations.
However, two suppliers have so far refused to enter into these arrangements or proposals to extend payment terms, being Kysen and a smaller non-affiliated supplier called “Modern Telecom Engineering” LLC.
The company added that it will publish its 2023 financial results as soon as possible.