Ukraine court releases 50.3% stake in Ferrexpo Poltava Mining

The Kyiv Court of Appeal ruled on June 2 to cancel a
restriction on a 50.3% stake in the shares of Ferrexpo Poltava Mining (FPM),
the main production asset of Ferrexpo plc (FXPO LN), the company said in a June
3 statement.

With its ruling, the court satisfied an appeal by
Ferrexpo AG, the owner of 100% of FPM, against an earlier decision to put a
restriction on 50.3% of FPM shares, which Ferrexpo reported on Jan. 31.

Recall, in December the National Bank of Ukraine (NBU)
obtained an enforcement order to recover UAH 1.54 bln
(USD 60 mln) from company founder Kostyantin Zhevago in relation to his
personal commitment to repay an NBU refinancing loan to failed F&C Bank.

Zhevago owns a 50.3% stake in Ferrexpo plc, and
Ferrexpo AG is 100% owned by Ferrexpo plc.

Dmytro Khoroshun: This
decision is positive for Ferrexpo because it reduces the possibility of the
company losing control of FPM due to third parties trying to recover assets
from Zhevago.

Although it is not known which party sought the
restriction, it could have been the NBU trying to enforce its claims against
Zhevago. Namely, the NBU could argue that if Zhevago owns 50.3% in the entire
Ferrexpo Group, then the NBU’s claims apply to a 50.3% stake in FPM that
Zhevago owns indirectly.

We think that such logic is unjust because it
completely disregards the possible substantial damage to Ferrexpo’s minority shareholders
in case Ferrexpo loses control over FPM. It is therefore positive that the
appeals court decided against whoever tried to restrict the 50.3% stake in FPM.