Ferrexpo raises $100 million and returns to trading in London

The mining company Ferrexpo, with main assets in Ukraine, announced successful results of a share placement of approximately $100 million. Half of this amount - $50 million - was agreed to be invested by the founder and chairman of the board of directors of Kernel, Andriy Verevskyi. After the publication of financial statements, Ferrexpo is also preparing to resume trading of its shares on the London Stock Exchange.

This is stated in Ferrexpo's announcement to the London Stock Exchange.

The company placed and agreed subscriptions for a total of 448.85 million new shares at a price of 16.5 pence per share. This is expected to provide Ferrexpo with approximately $100 million in gross proceeds.

The placement price turned out to be 42.3% lower than the 28.6 pence - which is how much Ferrexpo shares cost on April 30, the last day of trading before their suspension.

The new shares are equivalent to approximately 73.1% of Ferrexpo's current share capital, so the deal will lead to substantial dilution of existing shareholders' stakes.

Verevskyi invests $50 million

The largest new investor was Ukrainian businessman Andriy Verevskyi - founder and chairman of the board of directors of the agricultural holding Kernel. He provided a so-called anchor commitment to invest $50 million.

After the completion of the deal, Verevskyi is expected to receive 224.42 million new Ferrexpo shares.

Another approximately $40 million is to be contributed by Fevamotinico S.a.r.l. - the largest existing shareholder of Ferrexpo. The company agreed to purchase 179.54 million new shares at the same price.

The rest of the placement was provided by other new and existing institutional investors. Ferrexpo noted that demand for the shares exceeded the offered volume.

Money needed to launch production in Ukraine

Ferrexpo plans to use the raised funds primarily for replenishing working capital and resuming operations of mining and pelletizing enterprises in Ukraine.

The money is to be used for paying for electricity, labor, materials, logistics, and technical maintenance, as well as for the restoration of deferred expenses and gradual increase in production.

The company's management expects that the received financing will be sufficient to cover Ferrexpo's short-term needs for approximately 18 months, provided operations continue at a reduced rate.

Ferrexpo temporarily halted production of iron ore products in Ukraine in early August. The company explained this by restrictions on the main Black Sea export route and the need to preserve working capital.

Before attracting new capital, the group's financial position significantly deteriorated. According to Ferrexpo, its cash and cash equivalents decreased to approximately $26.4 million, and its net cash position, including lease liabilities, was about $17.8 million.

Company warned of insolvency risk

Earlier, Ferrexpo stated that a share placement of approximately $100 million was the only realistic financing option that could be implemented quickly enough to support the group's operations.

In the event of an unsuccessful capital raise, the company warned of significant risk to its ability to continue operations and the possible need to initiate insolvency procedures.

One of the main reasons for Ferrexpo's liquidity deficit is the cessation of VAT refunds to its Ukrainian enterprises. According to the company, as of June 30, the net VAT receivable in Ukraine was about $88 million.

Ferrexpo claims that VAT payments to its Ukrainian companies effectively ceased since March 2025 after the introduction of personal sanctions against Kostyantyn Zhevago, associated with the group's largest shareholder. The company is appealing the refusals to refund in Ukrainian courts.

Shares to resume trading in London

Trading in Ferrexpo shares on the London Stock Exchange was suspended on May 1 due to a delay in publishing audited financial statements for 2025. The company published them on September 3 after determining the financing mechanism.

Ferrexpo expects the suspension of trading to be lifted at 07:30 London time on September 7.

At the same time, the $100 million raise itself still needs to be formally completed. The general meeting of shareholders, which must approve the issue of new shares, is scheduled for September 21. Trading of new shares is expected to begin on September 22.

Thus, Ferrexpo has already formed a pool of investors for the entire required amount and announced successful results of the placement, but the final closing of the transaction depends on the shareholders' decision.

Based on materials from: Ferrexpo / London Stock Exchange, Ferrexpo / London Stock Exchange