Ferrexpo suffers expected setback in recovering USD 8.6 mln
25 October 2017
A subsidiary of Ukraine’s largest iron ore pellet exporter Ferrexpo (FXPO LN, FXPOLN) lost its appeal with the High Economic Court of Ukraine regarding the return of two amounts, UAH 163.5 mln and USD 2.5 mln, from Finance & Credit Bank, the finbalance.com.ua news site reported on Oct. 24. The court ruled on Oct. 17 to reject the claim by Ferrexpo Poltava Mining that the amounts were transferred to its account with Finance & Credit Bank not on Sept. 17, 2015 (as was established by a lower court), but on Sept. 22, 2015. In its decision, the court emphasized that it was not authorized to review the merits of the case.
Recall, Finance & Credit Bank, where Ferrexpo kept USD 174 mln in deposits, was declared insolvent on Sept. 17, 2015. Kostiantyn Zhevago, the key Ferrexpo shareholder, was also the main shareholder in the bank.
Dmytro Khoroshun: This latest court decision, which is not unexpected, might be not the final chapter in this matter. However, we think that in order to make progress, Ferrexpo will have to get creative, such as finding newly discovered evidence or new parties concerned. Ultimately, we view the probability of Ferrexpo recovering USD 8.6 mln from the insolvent bank as low. We retain our neutral view on Ferrexpo Eurobonds.
