Ferrexpo faces liquidity crisis, requires $100 million capital increase

Ukrainian iron ore pellet producer Ferrexpo is facing a critical liquidity shortage, with internal forecasts suggesting available cash reserves may only last until mid-September. To ensure survival, the company is planning a capital increase of at least $100 million.

As of June 30, Ferrexpo reported approximately $27 million in available cash and a net cash position of $21 million. While management previously expected to maintain operations until the start of the fourth quarter, recent operational disruptions have significantly shortened this timeline.

Several factors are contributing to the financial strain. The company is awaiting a $90.4 million VAT refund from the Ukrainian state, which remains blocked. Additionally, operational activities, including iron ore mining and pelletizing, were temporarily suspended following an incident on July 28, when a vessel carrying pellets was struck by drones in the Black Sea, resulting in the death of a crew member.