Ferrexpo Plc shares fell sharply on Wednesday after the Ukrainian iron ore pellet producer disclosed a constrained cash position and said it was considering an equity issuance to address a potential financing shortfall.
Trading at 40.50 pence, the stock opened at 49.40 pence and hit an intraday low of 38 pence, with about 3.28 million shares changing hands as the company released its liquidity update.
The company reported net accessible cash of approximately $22 million as of March 31, down from $47 million at the end of December 2025. It also noted available cash of $35 million with no debt drawn, a figure that falls after accounting for funds held with MBaer Merchant Bank.
In its statement, Ferrexpo said: "The Group estimates that it has sufficient cash until at least the end of June 2026." The company added that it was reviewing "potential funding options, which could include an equity capital raise," but cautioned that there was no certainty such measures would be successful.
Ferrexpo highlighted that Ukraine continued to withhold VAT refunds through the first quarter, increasing the total owed to roughly $80 million at the end of March. The company warned that if the VAT issue is not resolved in time, it could cause "material negative consequences."
Operationally, the business reported that only one pellet line remained in operation after attacks on Ukrainian energy infrastructure in January 2026 caused production disruptions. Management said production has partially recovered as electricity availability and pricing improved.
To preserve cash, Ferrexpo implemented a series of cost measures, including reducing employee working hours, suspending non-essential capital expenditure, and halting all non-essential procurement, overheads and corporate social responsibility activities.
The company also said it needs additional time to finalise its annual accounts and expects to publish them on or before April 30.
Key points
- Ferrexpo's net accessible cash was about $22 million at March 31, down from $47 million at end-December 2025.
- The group estimates cash sufficiency only through at least end-June 2026 and is reviewing funding options, potentially an equity raise.
- Operational impacts from January attacks on energy infrastructure have left one pellet line running, with partial recovery tied to improved electricity availability and pricing.
Risks and uncertainties
- Withheld VAT refunds totalling roughly $80 million at end-March could have material negative consequences if not resolved - this affects the company's liquidity and the broader mining and materials sector.
- The potential inability to secure additional funding, including an equity capital raise, brings uncertainty to the company's near-term financing - a market and investor risk.
- Operational disruptions from energy infrastructure attacks and the sensitivity of production to electricity availability and pricing remain a source of operational and market risk.
This update has prompted market reaction reflected in the share price decline and increased trading volume as investors weighed the cash constraints and the uncertain outcome of potential financing measures.