Ferrexpo’s Available Cash Shrinks to $22 Million as $90 Million in Tax Refunds Stay Blocked

Ferrexpo has barely six weeks of liquidity left. At the end of March, the iron ore miner held $35 million in cash, but after stripping out funds trapped at MBaer Merchant Bank in Switzerland, just $22 million remains freely usable. Management expects that sum to evaporate by the end of June, leaving the company unable to cover basic operating costs without fresh capital.

The irony is that the Ukrainian state owes Ferrexpo more than $90 million in unpaid value-added tax reimbursements. That money would more than plug the gap, but the tax authority has simply stopped processing refunds. The receivables exist only on the balance sheet, not in the bank account.

A Hollow AGM

When Ferrexpo’s shareholders gather in London later this month, the meeting will be a purely formal exercise. There is no annual report for 2025 to approve – the company has not published one. No vote on the auditor can take place. Even the share itself has been suspended from trading on the London Stock Exchange since May 1, with the last price of 28.58 pence frozen in time.

The agenda consists of little more than re-electing board members. A separate shareholder meeting will be called only after an audited set of accounts finally emerges – a moment that has no scheduled date.

Production in Freefall

The reason for the accounting paralysis is brutally straightforward. Ferrexpo halted operations in January 2026 after Russian strikes knocked out large parts of Ukraine’s power grid. Production restarted in February, but only one of four pelletising lines is running. Output in the first quarter collapsed to 592,750 tonnes, a drop of 72.1 percent from a year earlier.

Should investors sell immediately? Or is it worth buying Ferrexpo?

Energy costs account for half of Ferrexpo’s production expenses, and the nationwide attacks on the electricity network have made continuous operation impossible. A 32-hour ceasefire in May offered no real respite; for a company whose mines sit in central Ukraine, a humanitarian pause does not equate to a viable business environment.

The Rescue That Never Materialised

Ferrexpo needs at least $100 million in fresh equity to bridge the next 18 months. Institutional investors expressed interest in exceeding that amount, and the largest shareholder – Fevamotinico Sarl, which controls 49.3 percent of the stock – signalled its willingness to participate pro rata. But the investors attached conditions that could not be met within the required timeframe. With no audited accounts and no going-concern opinion from the auditor, any capital increase was blocked before it began.

Desperate measures are now in play. The company has put its bulk carrier, the Iron Destiny, up for sale with an expected price of $7.7 million. Working hours have been cut and all non-essential investment halted.

A Bet on Peace

Beneath the immediate crisis lies an extraordinary long-term proposition. Ferrexpo operates three mines with combined reserves of 1.7 billion tonnes of iron ore – enough for 50 years of extraction at current levels. If the war ends and Ukraine’s energy infrastructure is rebuilt, the blocked tax refunds would flow, power would return, and Ferrexpo could resume full production. In that scenario, the company would become a strategic asset for the country’s reconstruction.

The 52-week trading range before the suspension captured that binary bet: a low of 27.20 pence and a high of 87.10 pence. At the suspended price, shareholders are essentially wagering that peace will arrive before the cash runs out. But for now, the decision does not rest with management or investors – it rests with the trajectory of a conflict that shows no sign of ending.