Ukraine appeal court finds against Ferrexpo
By Abigail Townsend
Date: Tuesday 20 Sep 2022
(Sharecast News) - Ukraine's appeal court has found against Ferrexpo in a long-running dispute over a 2002 deal, sending shares in the Swiss miner lower.
The court said the sale was invalid, and that Ferrexpo's 40.19% stake in Ferrexpo Poltava Mining (FPM) should be transferred to the former shareholders of FPM.
Under the 2002 deal, a 40.19% stake in the Ukrainian miner was sold to its former chief executive, Kostyantin Zhevago, and other parties. But four former shareholders launched legal action against the London-listed miner to invalidate the deal.
In May last year, the court of first instance ruled in favour of Ferrexpo AG, a wholly-owned subsidiary Ferrexpo. The claimants responded by launching an appeal a month later.
Ferrexpo said it was exploring all options, including its right to appeal to the Supreme Court of Ukraine.
It added: "Based on the details of the judgement provided by the appeal court, it is management's view that Ferrexpo AG has compelling arguments to defend its position."
Ferrexpo produces the iron ore pellets used in steel production. The Poltava open pit mine in Ukraine is Ferrexpo's largest resource, with more than 1bn tonnes of JORC-compliant ore reserves and an estimated life of 50 years. Around 80m tonnes, including 17m tonnes of high grade iron ore for processing, was mined at Poltava last year.
Shares in the FTSE 250 firm were down 6% at 142.4p as at 0900 BST.
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