Ferrexpo shareholders elect all directors at AGM

Ukraine’s largest iron ore pellet exporter Ferrexpo
(FXPO LN) conducted its AGM on June 7 re-electing and electing all directors as
proposed. In particular, Vitalii Lisovenko, an independent director, was
re-elected with 93.85% of all votes, including 83.92% among independent
(excluding controlling) shareholders.

Among non-independent directors, Stephen Lucas was
re-elected with 91.69% of all votes, Kostyantyn Zhevago – with 93.7%,
Christopher Mawe – with 94.77%. Lucio Genovese was elected with 97.37%.

Most of independent shareholders (83.88% according to
our calculations) voted against the agenda’s Resolution 1 to receive the 2018
report and accounts, which, however, was passed among the total number of
shareholders, including controlling (66.69%). Ferrexpo said in its June 7
statement that it notes the vote on Resolution 1 with disappointment.

Dmytro Khoroshun: Ferrexpo’s
shareholders did not stage a major revolt at this AGM despite the Blooming Land affair, which is
evident from the confirmation of each director, even among independent
shareholders. We calculate that Stephen Lucas received 78% of independent
shareholders’ votes, Kostyantyn Zhevago – 83%, Christopher Mawe – 86%.

This is in stark contrast with the AGM conducted in
May 2016, following Ferrexpo’s loss of about USD 175 mln due to the insolvency
of Bank Finance and Credit in 2015. At the 2016 AGM, independent shareholders
voted down five independent directors, forcing Ferrexpo to conduct second votes
for some and to replace the others. At that AGM, 76% of independent shareholders
also voted against re-electing Zhevago as a director, but the resolution was
passed among all shareholders, counting Zhevago’s own votes.

We conclude that the independent shareholders’
revolt against Resolution 1 at the 2019 AGM is mostly symbolic, and that the
Blooming Land affair, so far, has done less damage to Ferrexpo’s image among
independent shareholders than the Bank Finance and Credit affair in 2016.