--- title: "Ferrexpo Financial Collapse: How Kyiv's Conflict with Zhevago Led to Production Halt and Bankruptcy Threat" description: "🚨 Ferrexpo on the brink of bankruptcy: FT describes a catastrophic situation. 📉 The company has halted mining and is selling off stocks. 💰 Kyiv is withholding $90 million in VAT due to sanctions against Zhevago. 🚫 Zhevago is blocking the life-saving share issuance, fearing loss of control. ⚖️ Capitalization has fallen to $200 million, the court is already considering the bankruptcy case." date: 2026-08-16T17:25:05.000Z lang: en url: https://xab.info/en/posts/ferrexpo-financial-collapse-zhevago-kyiv-conflict-2026 tags: [ferrexpo, konstantin-zhevago, ukraine-economy, bankruptcy, mining-industry] publisher: "XAB.info" --- # Ferrexpo Financial Collapse: How Kyiv's Conflict with Zhevago Led to Production Halt and Bankruptcy Threat ![Massive dump truck at Ferrexpo mine in Ukraine — symbol of halted mining due to conflict with Zhevakho and bankruptcy threat](https://xab.info/media/2026/08/16/ferrexpo-bankrotstvo-zhevago-konflikt-kiev-2026/ferrexpo-bankrotstvo-zhevago-konflikt-kiev-2026-1.webp) ## 🎯 Key Points - Ferrexpo has halted mining and is on the verge of insolvency due to a shortage of $100 million. - Ukrainian authorities blocked the return of $90 million in VAT due to sanctions against Konstantin Zhevago. - Zhevago is blocking the additional share issuance necessary to save the company. - The company's capitalization has fallen to $200 million, and trading on the LSE has been suspended. 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. ## 🔍 Fact-Check Verification - [Ferrexpo warns of material negative consequences should fundraise fail](https://www.lse.co.uk/news/ferrexpo-warns-of-material-negative-consequences-should-fundraise-fail-rtau2c2zg3xoi79.html) - Подтверждает предупреждение о последствиях неудачи в привлечении средств. - [Ferrexpo shares plummet as miner cautions over funding options](https://uk.finance.yahoo.com/news/ferrexpo-shares-plummet-miner-cautions-094700754.html) - Подтверждает падение акций и проблемы с финансированием. - [Ferrexpo pursuing $100m equity raise to shore up liquidity](https://www.lse.co.uk/news/ferrexpo-pursuing-100m-equity-raise-to-shore-up-liquidity-4784tsj0t7tktgb.html) - Подтверждает предупреждение о последствиях неудачи в привлечении средств. ## ❓ FAQ ### Q: Why did Ferrexpo halt mining? **A:** Mining was halted on August 5, 2026, due to a critical lack of working capital and export blockage. ### Q: What is Konstantin Zhevago's role in the crisis? **A:** Zhevago is blocking the additional share issuance necessary to attract capital in order to maintain control over 49% of the company. ### Q: Why is Ukraine not returning the VAT? **A:** The State Tax Service blocked the return of $90 million in VAT due to NSDC sanctions against Konstantin Zhevago.