Ferrexpo Halts Ukraine Production, Citing War Risks and Financial Issues
Ferrexpo's Operational and Financial Challenges Amid Ukraine Conflict
Aug 5 (Reuters) - UK-listed Ferrexpo temporarily suspended its Ukraine production operations on Wednesday due to war-related risks and said the resumption was dependent on the injection of working capital into the iron ore pellet producer.
Background on Ferrexpo's Struggles
Here are some details and background on Ferrexpo's struggles:
Impact of Renewed Drone Attacks
• The Ukraine-focused miner's financial struggles have been exacerbated by the renewed drone attacks by Russia in the Black Sea region, which the firm uses to export its pellets.
Current Supply Capabilities
• The company is currently able to supply its European customers from existing inventory stockpiles, Ferrexpo said.
Financial Status and Trading Suspension
• The firm, whose shares have been suspended from trading since May after it failed to secure additional funding, said it expects its net accessible cash resources to be sufficient until mid-September.
Export Vessel Incident
• The vessel carrying its DR-grade pellet exports, struck by drones in late July, has been successfully retrieved from the war-prone area in the Black Sea and is headed towards the nearest port, the firm said.
Insolvency Risks and Financial Strain
Suspension of VAT Refunds and Energy Attacks
• The Swiss-headquartered miner has been working to stave off insolvency after suspension of value-added tax refunds, combined with attacks on Ukraine's energy grid, severely strained the company's finances.
(Reporting by Prerna Bedi in Bengaluru; Editing by Rashmi Aich)
