Ferrexpo secures US$15m shareholder loan for working capital ahead of US$100m raise

Ferrexpo has secured a US$15m unsecured loan from its largest shareholder at 9.75% to provide immediate working-capital liquidity while the Ukrainian iron ore producer works towards completing an approximately US$100m equity fundraising.

Fevamotinico S.à r.l., which controls 49.27% of votes at Ferrexpo general meetings, is making the 12-month facility available as a pre-payment of part of its approximately US$40m subscription under the wider fundraising. Ferrexpo said the cash will support working-capital requirements and production operations that restarted on 7 September.

The structure gives the company liquidity before the equity transaction is completed. Principal and accrued interest are intended to be repaid by set-off against amounts Fevamotinico owes under its subscription agreement when the new shares are admitted.

The loan is unsecured but subordinated, ranking behind Ferrexpo’s existing unsecured creditors. Fevamotinico has also agreed not to seek cash repayment before maturity and is subject to a standstill preventing it from petitioning for the company’s winding up, administration or another insolvency process while the provisions apply.

If shareholders do not approve the fundraising resolutions at the 21 September general meeting, or the placing agreement is terminated, Ferrexpo may elect to repay the loan through new shares, subject to legal and regulatory conditions and independent shareholder approval. Otherwise, principal and unpaid interest would fall due in cash after 12 months.

The covenant package is particularly relevant to working-capital financiers. While the loan remains outstanding, Ferrexpo is restricted from incurring additional financial indebtedness or granting security outside specified permitted categories. Those carve-outs expressly include a potential trade finance facility, preserving room for another financing structure alongside the shareholder bridge.

Ferrexpo restarted one pellet line at its Ukrainian operations on 7 September after mobilising operations following the fundraising announcement. With Black Sea ports and vessels facing continuing attacks, the company said it intends to focus exports on European customers.

The US$15m facility is small relative to the proposed equity raise, but its function is immediate. It bridges the period between restarting production and receiving longer-term capital, while leaving a route open for trade finance to support the export cycle.