Ferrexpo to prepay PXF facility in full
30 June 2021
Ukraine’s largest iron ore pellet exporter Ferrexpo
(FXPO LN) has approved an early repayment of its pre-export finance (PXF)
facility, according to the company’s June 30 regulatory disclosure.
The full prepayment of the facility (USD 257 mln
outstanding at end-2020) will take place on June 30, Ferrexpo said, adding that
the facility will subsequently be cancelled.
The PXF repayment was scheduled to end in 2022,
Ferrexpo said. The company had to pay USD 33 mln quarterly until 4Q22 under the
original schedule, according to Concorde Capital estimates.
Following the prepayment, Ferrexpo will be well
positioned to continue investing, grow its production volumes, improve pellet
quality, and deliver returns to shareholders, according to the company interim
CEO Jim North, as cited by the disclosure.
Recall, in March, Ferrexpo mentioned that it has almost exhausted its reserves available for distribution
to its shareholders under the relevant thin capitalization rules and covenants
for its major bank debt facility. The company said at the time that the payment
of further dividends in 2021 will require a waiver from the lenders or a full
repayment of this facility.
Dmytro Khoroshun: Ferrexpo
should be able to pay higher dividends as a result of the PXF prepayment.
Ferrexpo’s dividends for 2021 might approach USc 85.8
per share declared for 2020, we think, unless the iron ore prices plunge in
2H21.
