Ferrexpo PLC has provided an update on its subsidiary, Ferrexpo Poltava Mining (FPM), stating that operations have been performing well with no disruption to production and sale of products. The production volumes for February 2024 were the highest since the full-scale invasion of Ukraine in February 2022. The company and its workforce continue to adapt to overcome the challenges posed by the war.
The preparatory hearing at the Commercial Court in Poltava Oblast, scheduled for 12 March 2024, to consider the application from LLC PCC "Kysen" was postponed and is now rescheduled for 9 April 2024. The debt claimed by Kysen under the supply agreements has increased to UAH4.5 million (approximately US$115,000). FPM continues to contest the separate sureties claim and has sufficient financial resources to continue operating, including settling the Kysen debt.
FPM is permitted to pay salaries, taxes, and energy suppliers from its accounts, but payment to other suppliers is not allowed due to restrictions on the operation of its bank accounts in Ukraine. The company has entered into separate arrangements with the majority of its key creditors and suppliers to discharge payment obligations, ensuring the ongoing operation of the business is unaffected. However, two suppliers, including Kysen, have so far refused to enter into these arrangements or proposals to extend payment terms.
Two court hearings scheduled for 20 March 2024 did not take place. The Ukrainian court of appeal confirmed a claim against FPM in the amount of UAH 4,727 million (approximately US$125 million) in respect of contested sureties. FPM appealed that decision to the Supreme Court of Ukraine, and a new panel of judges has been appointed, with the company awaiting a new court date. Additionally, a Ukrainian court of appeal bail hearing for the FPM General Director regarding the royalties case had been scheduled for 20 March 2024 but was postponed, with a reconvened hearing scheduled for 2 April 2024.
Ferrexpo is working closely with its Ukrainian legal counsel and international advisers to address these matters, with the operations of Ferrexpo remaining unaffected. The Group is continuing to work with its auditors to finalize its FY 2023 Results, and further updates will be provided as appropriate.