Ferrexpo's 9.75% Lifeline: A Miner Caught Between Black Sea Blockades and a Swiss Asset Freeze
Published on 09/19/2026 at 02:40 | Editorial boerse-global.de
Ferrexpo's ability to keep its pelletizing machines turning has become inseparable from the question of who will pay for them. The London-listed iron ore producer, whose operations sit squarely inside a war zone, is now leaning on its largest shareholder for emergency working capital while Ukrainian prosecutors pursue a nine-figure misappropriation case that reaches back more than a decade.
At the heart of the current cash squeeze is a simple geographic fact: Ferrexpo's high-grade pellets leave Ukraine by sea, and those sea lanes are under attack. When strikes on Ukrainian ports severed the Black Sea export corridor, management pulled the emergency brake on August 5, suspending production temporarily to preserve what working capital remained. The company restarted a single production line on September 7 — a gesture of operational resilience that does nothing to fix the structural vulnerability of its shipping routes.
That restart has come at a steep price. Fevamotinico, the company's biggest investor, is extending a bridge loan carrying a 9.75% interest rate, a risk premium that speaks volumes about how lenders now view the asset. The facility follows a capital increase set in motion roughly two weeks ago.
The balance sheet offers little cushion. Ferrexpo closed 2025 with $47 million in net cash, but Ukrainian tax authorities withheld $61 million in VAT refunds during the same year, tightening liquidity further. Against that backdrop, the room to fund a full production ramp-up is wafer-thin.
Should investors sell immediately? Or is it worth buying Ferrexpo?
A Legal Shadow Stretching Back to 2013
While the company scrambles for operating cash, a far older set of transactions is demanding attention. Between 2013 and 2018, three of Ferrexpo's iron ore combines — Poltava foremost among them — channeled roughly $110 million to the charity "Kvituchiy Kray." Auditors at Crowe concluded that at least $74 million never reached charitable projects, and Deloitte had already been unable to confirm the use of a further $33.5 million back in 2018.
Media reports link the funds to the survival of Bank Finance and Credit, another asset in the empire of former CEO Konstantin Zhevago. In the months before the bank failed in September 2015, approximately $22 million was allegedly diverted through subsidiaries to fund a capital increase at the institution. Ukraine's DBR now puts the total outflow at $113 million, funds frozen in Switzerland in February 2024.
A separate bribery case compounds the pressure. Investigators from NABU and SAP allege that $2.7 million changed hands to sway a Supreme Court ruling in favor of Zhevago's structures. The court's then-president, Kniazev, was arrested in May 2023, with a $450,000 tranche reportedly seized. Zhevago himself was detained in Courchevel in December 2022 and later released on EUR 1 million bail; France declined to extradite him in November 2023. Special investigations widened in April 2026, and by May 2026 additional Supreme Court judges had fallen under suspicion.
Shareholders Face a September Deadline
The equity market has rendered its verdict. At a closing price of EUR 0.3228, the stock has shed 64% since the start of the year, though it sits 15% above its 52-week low — a recovery built on uncertain ground. The shares trade 53% below their 200-day moving average. Indefinite sanctions imposed by the national security council (SNBO) in February 2025, plus SBU reports of affiliated companies shipping to Russia between 2017 and 2022, have kept investor confidence badly damaged.
Everything now converges on London. On September 21, shareholders vote on issuing 448.8 million new shares; the new stock is scheduled for admission to trading on the London exchange the following day, September 22. For a miner fighting to stay operational while its export arteries remain under fire, the ballot is less about growth than about simple survival.
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