Ferrexpo, a mining company with its main assets in Ukraine, has secured a $15 million credit facility from Fevamotinico SaRL, a company owned by Minco Trust, whose ultimate beneficial owner is the businessman Konstantin Zhevago.
According to a stock exchange announcement, Ferrexpo plc has entered into a loan agreement with its largest shareholder, Fevamotinico, which will provide an unsecured credit facility with a principal amount of $15 million.
The purpose of the loan is to provide the company with immediate access to liquidity until the completion of the capital raising process totalling approximately $100 million, as announced on 4 September 2026, as well as to support working capital requirements and production activities, which was resumed on 7 September. The loan effectively constitutes an advance payment of part of the funds (approximately $40 million) that Fevamotinico has undertaken to contribute as part of the capital raising.
It is specified that interest is charged on the loan amount at a rate of 9.75 per cent per annum; the repayment term is 12 months from the date the funds are disbursed. Repayment of the loan, together with accrued interest, will be effected by offsetting the amounts that Fevamotinico is required to pay to Ferrexpo under the share subscription agreement following the company’s admission to trading. This loan is subordinated; consequently, claims arising from it will be satisfied after the claims of the company’s existing unsecured creditors.
Should the general meeting to be held on 21 September 2026 fail to approve the capital raising, or should the placement agreement be terminated, the company may decide to repay the loan by issuing new ordinary shares at the placement price (or, if the fair market value is lower than the placement price, – at such a lower price as agreed between the company and Fevamotinico), provided that all statutory or regulatory requirements regarding such a share issue are complied with, in particular the obtaining of prior approval from independent shareholders.
Furthermore, whilst the loan remains outstanding, the loan agreement restricts the group entities’ ability to raise debt finance or provide security against liabilities, except for those falling within certain permitted categories (in particular, a potential credit facility to finance trading operations, as well as certain transactions entered into in the ordinary course of business or between group companies).
The terms of the loan provide for certain standard events of default, entitling Fevamotinico to demand early repayment of the loan. However, Fevamotinico has agreed not to take any action to recover the loan debt in cash prior to the repayment date. The loan agreement also contains a standstill provision, under which Fevamotinico undertakes not to make any claims against Ferrexpo or to initiate proceedings for its liquidation, administration or any other insolvency proceedings, nor to facilitate such actions by other parties.
If the funds are not raised and the placement agreement is terminated, the principal amount of the loan, together with any interest accrued but not paid, shall be repayable in cash on the maturity date, unless the alternative repayment mechanism described above, involving the transfer of shares, is successfully implemented. If Ferrexpo is unable to repay the loan in cash by the due date, and the alternative mechanism for repayment by way of shares is not implemented, the company will have to raise additional funding or negotiate alternative terms for the settlement of the debt with Fevamotinico.
Fevamotinico is a connected party of Ferrexpo in accordance with the UK Listing Rules (UK Listing Rules), as it is a significant shareholder of the company and is entitled to vote (or control the exercise of voting rights) in respect of 49.27 per cent of the votes at a general meeting of shareholders. Accordingly, the granting of the loan is deemed to be a transaction with a connected party.
The Company’s directors consider the terms of the loan to be fair and reasonable in the interests of shareholders. The Board of Directors has received appropriate advice from BDO LLP, which acts as the company’s sponsor. In providing this advice to the directors, BDO LLP took into account the commercial assessment of the loan carried out by the directors themselves.
FerrExpo holds a 100 per cent stake in Eristovsky GOK LLC, a 99.9 per cent stake in Belanovsky GOK LLC and 100 per cent of the shares in Poltavsky GOK PJSC.