Ferrexpo struggles with $58k bill in Ukraine

11th Mar 2024 07:38

(Sharecast News) - Iron ore producer Ferrexpo has announced that it needs to extend the payment terms on a $58,000 bill from a supplier for its Ukrainian operations as the business's accounts continue to be frozen.

Ferrexpo confirmed press speculation that Kysen, a supplier to Ferrexpo Poltava Mining, has sought creditor protection proceedings against the company, with court hearings starting this week.

"Having become aware of proceedings the board of Ferrexpo has taken steps to settle the debt," Ferrexpo said in a statement on Monday.

However, it added: "Given restrictions with the operation of FPM's bank accounts in Ukraine, and the nature of the payment that is being made to settle the debt, FPM is not able to provide assurance now that funds will be received in a timely manner and for that reason FPM is, in parallel, also seeking to agree an extension of payment terms."

Ferrexpo is currently facing several court cases or investigations by Ukrainian authorities trying to recover assets from founder and 49.5% shareholder Kostyantin Zhevago. One of these investigations relate to the potential underpayment of iron ore royalty payments during the years 2018 to 2021 - a claim that Ferrexpo denies.

Ferrexpo announced last month it was cancelling its interim dividend just days before it was due to be paid out, following the ongoing legal battles.

The company said it is working closely with its legal counsel and other advisers "to consider and address the situation" and will make further announcements as appropriate. "Ferrexpo's operations remain unaffected at this time," the company confirmed.