Ferrexpo Slumps After Warning Cash May Run Out by End of August

(Bloomberg) — Ferrexpo Plc slumped 13% after the Ukrainian iron ore producer warned that without fresh funding it could run out of cash by the end of August.

The London-listed company said on Wednesday that it’s considering an equity raise of at least $100 million as it races to shore up liquidity after Russia’s invasion of Ukraine curbed its operating capacity. That would support its operations over the next 18 months.

“The board believes that an equity capital raise is currently the only viable solution in the timeframe required,” Ferrexpo said Wednesday in a statement.

Ferrexpo faces mounting operational and financial pressures stemming from the war, including energy shortages, logistics disruptions and legal proceedings. The company said failure to complete the fundraising on schedule — potentially by April 30 — is likely to lead to the suspension of its shares and increases the risk of insolvency.

Ferrexpo’s output is running at about a quarter of pre-war capacity, while cash reserves have fallen sharply from over $100 million at the end of 2024.

The group said it has about $17 million of accessible cash as of April 17 and expects to receive $7.7 million from the sale of its transhipping vessel Iron Destiny. Even with those proceeds, Ferrexpo reiterated that its cash runway extends only until late summer, leaving it exposed to volatility in iron ore prices, energy costs and operational disruptions.

Ferrexpo said the fundraising would likely be structured as a placing of new shares, subject to board and shareholder approval, with backing from its largest investor Fevamotinico still under discussion.

The shareholder, which holds about 49% of the Ferrexpo, is weighing the potential dilution from the deal and whether to participate. The company also flagged risks tied to its historical association with founder Kostyantin Zhevago, whose legal issues and sanctions in Ukraine have contributed to the suspension of VAT refunds and constrained access to financing.

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