Ferrexpo Financial Collapse: How Kyiv's Conflict with Zhevago Led to Production Halt and Bankruptcy Threat

Leading global financial publication The Financial Times (FT) has published a detailed report on the critical situation of the mining group Ferrexpo. According to data as of August 16, 2026, Ukraine's largest producer of iron ore pellets is on the verge of complete insolvency. The company, whose shares have long been considered a "blue chip" on the London Stock Exchange, has only a few weeks left to prevent uncontrolled bankruptcy.

Crisis Factors: Tax Blockade and Logistical Deadlock

The group's financial state has been reduced to a critical minimum due to a combination of internal and external factors. According to the FT investigation, the key blow was the position of the State Tax Service of Ukraine. Authorities blocked the payment of a legitimate value-added tax (VAT) refund amounting to $90 million for the holding's subsidiaries — the Poltava and Yeristovo Mining and Processing Plants. The official motivation for the block was the introduction of personal sanctions by the National Security and Defense Council (NSDC) against the company's founder, Konstantin Zhevago, who is under international arrest warrant.

Parallel to fiscal problems, the company faced a logistical paralysis. Due to ongoing hostilities and drone attacks on port infrastructure, as well as an incident with a ship in the Black Sea at the end of July, Ferrexpo was forced to completely halt ore mining from August 5, 2026. Currently, the company's management is selling off warehouse stocks to European steelmakers, however, the enterprise's cash on hand will last strictly until mid-September 2026.

Intra-Corporate Deadlock: Share Issuance Blockade

The only legal way out of the prolonged liquidity deficit, according to Ferrexpo's board of directors, is to conduct an emergency additional share issuance of at least $100 million. This would allow the attraction of independent institutional investors and the restoration of operational activities. However, the plan is completely blocked by the largest shareholder.

Konstantin Zhevago, who controls 49.3% of the company's voting shares through trusts, categorically refuses to approve the issuance. According to experts, the businessman fears that issuing new shares will dilute his stake and deprive him of actual control over the assets. Acting Chairman of the Board of Directors, Lucio Genovese, told FT that the company "unfairly found itself caught in the crossfire of a dispute between Ukraine and our largest shareholder".

Contradictory Data

There is a discrepancy in the assessment of the company's prospects between official statements and market reality. On the one hand, the board of directors insists on the possibility of saving the business through investment attraction and negotiations with the state. On the other hand, the London Stock Exchange (LSE) suspended trading in shares back in May 2026 due to auditors' refusal to certify the annual report. The company's market capitalization has plummeted from pre-war $3 billion to a critical $200 million. Furthermore, the Commercial Court of the Poltava region has already launched a bankruptcy procedure for the Poltava Mining and Processing Plant upon creditors' lawsuit, which casts doubt on the possibility of continuing operations in the current format.

Consequences for the Economy and Investors

The situation is exacerbated by new claims from tax authorities. On August 6, 2026, Ukrainian tax officials issued a fine of 35.3 billion hryvnias (approximately $788 million) to the Poltava Mining and Processing Plant for alleged violation of currency control. Experts note that the collapse of Ferrexpo is a severe precedent for the investment climate. Among the shareholders of the British structure are the world's largest funds, including BlackRock. By allowing the fall of the largest exporter, Ukraine is striking a blow to its image as a safe jurisdiction for foreign direct investment.