Ferrexpo PLC, a premium iron ore pellet supplier, has announced that two of its Ukrainian subsidiaries, Ferrexpo Yeristovo Mining and Ferrexpo Belanovo Mining, have received documents from the Department of State Enforcement Service of the Ministry of Justice of Ukraine placing restrictions on certain corporate rights. The restrictions, known as an "arrest" in Ukrainian, apply to 50.3% of the shares held by Ferrexpo's Swiss subsidiary, Ferrexpo AG, in each of the subsidiaries. The restrictions prohibit the transfer of these shares but do not affect Ferrexpo AG's ownership, voting rights, or entitlement to dividends.
Ferrexpo confirms that it has no intention of transferring the shares in question. The restrictions are part of ongoing legal proceedings against Mr. Kostyantin Zhevago relating to Bank Finance & Credit and are not related to the Ferrexpo Group. The restrictions have been made as an initial stage in the enforcement process to satisfy a judgment debt owed by Mr. Zhevago to the National Bank of Ukraine.
Based on Ukrainian legal advice, Ferrexpo believes that the restrictions are unlawful and have been made contrary to Ukrainian law. The company is currently analyzing potential legal and other remedies and intends to defend its rights. If the enforcement process is not interrupted, it could potentially lead to a sale of the shares representing 50.3% of the issued shares in each of the subsidiaries.
Ferrexpo's operations remain unaffected by the restrictions. The company previously announced a share freeze on 7 March 2023, which is separate from the current restrictions. The freeze applies to 50.3% of Ferrexpo AG's shareholding in the two subsidiaries mentioned above, as well as in a third Ukrainian subsidiary, Ferrexpo Poltava Mining. The company has appealed to the Supreme Court of Ukraine to remove the restrictions under the previous share freeze.
This announcement contains inside information, and the person responsible for the release of this announcement is Mark Gregory, Group Company Secretary.