REG - Ferrexpo plc - Updates regarding Ukrainian subsidiary

FerrexpoAnnouncement

07/05/2024 07:15

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RNS Number : 3362N  Ferrexpo PLC  07 May 2024

 

7 May 2024

Ferrexpo plc

("Ferrexpo", the "Group" or the "Company")

 

Updates regarding Ukrainian subsidiary and senior manager

and smaller related party transaction

Ferrexpo plc (LSE: FXPO), provides an update on proceedings against the
Group's subsidiary Ferrexpo Poltava Mining ("FPM" or the "Company"). The Group
recently reported a significant increase in production and sales volumes for
the first quarter of 2024, the highest since the full-scale invasion of
Ukraine commenced in February 2022. Ongoing production at the Group's
Ukrainian operations continues to perform according to plan and without
disruption in April.

LLC PCC "Kysen" ("Kysen") update

A rescheduled preparatory hearing on 29 April 2024 at the Commercial Court in
Poltava Oblast (the "Court") to consider the application from Kysen, (as
previously announced on 11 and 25 March 2024), was postponed. A preparatory
hearing is now rescheduled for 4 June 2024.

Bail in connection with royalty related investigation

As previously reported in the Group's 2023 full year financial results, on 31
October 2023 a notice of suspicion was delivered to a senior manager of FPM
(Viktor Lotous, the General Director and Chair of the FPM Management Board),
regarding accusations for the potential underpayment of iron ore royalties. On
13 November 2023, a court of first instance approved a bail for Mr. Lotous for
approximately UAH 800 million (approximately US$20 million).  An appeal was
filed and on 29 April 2024 the Kyiv Court of Appeal approved a bail of UAH 650
million (approximately US$16.5 million).  The court did not provide any
rationale for the high bail amount, nor its alignment with the financial
standing of the suspect. This bail is separate to the previous bail amounts
which were disclosed in the Company's announcement made on 2 November 2023,
relating to a different investigation concerning the sale of waste products.

Following a detailed assessment of the position by the Board of Directors of
the Company, and taking into account the financial position of the Group, the
Group has decided to make a partial payment of the bail in the amount of UAH
50 million (approximately US$1.3million).  Under Ukrainian law, there is no
legal obligation to pay the remainder of the bail amount.  The partial
payment of the bail amount is a smaller related party transaction for the
purposes of Listing Rule 11.1.10R.  This announcement is therefore made in
accordance with Listing Rule 11.1.10R(2)(c).  As per the requirements of
Listing Rule 11.1.10R the Company has obtained written confirmation from an
FCA-approved sponsor firm that the terms of the transaction are fair and
reasonable as far as the shareholders of the Company are concerned.

The operations of Ferrexpo are unaffected.  Further announcements will be
made as appropriate.  This announcement contains inside information. The
person responsible for the release of this announcement is Mark Gregory, Group
Company Secretary.

 

For further information please contact:

 Ferrexpo:
 Nick Bias       n.bias@ferrexpo.ch        +44 (0)20 7389 8305

 Tavistock:
 Jos Simson      ferrexpo@tavistock.co.uk  +44 (0)20 7920 3150
 Gareth Tredway                            +44 (0)7785 974 264

 

About Ferrexpo:

Ferrexpo is a Swiss headquartered iron ore company, with assets in Ukraine,
and a premium listing on the London Stock Exchange, and part of the FTSE 250
index (ticker FXPO). The Group produces high-grade iron ore pellets, which are
a premium product for the global steel industry and enable reduced carbon
emissions and increased productivity for steelmakers when the Group's iron ore
pellets are converted into steel, compared to more commonly traded forms of
iron ore. Ferrexpo's operations have been supplying the global steel industry
for over 50 years. Before Russia's invasion of Ukraine in February 2022, the
Group was the world's third largest exporter of pellets to the global steel
industry. The Group has a customer base comprising of premium steel mills
around the world. For further information, please visit www.ferrexpo.com
(http://www.ferrexpo.com/) .

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