London Stock Exchange | 19 March 2025
Notification to Ukraine under international investment agreements
by Ferrexpo plc ("Ferrexpo" or the "Group")
Ferrexpo plc (LSE: FXPO) announces that the Company and its subsidiary, Ferrexpo AG, have provided a formal written notification to Ukraine under international investment agreements in place between Ukraine and the United Kingdom and Ukraine and Switzerland (the "UK-Ukraine BIT" and "Swiss-Ukraine BIT", respectively).
Background
As previously announced on 5 March 2025, a statement was made by the State Bureau of Investigation in Ukraine (SBI) stating that the Pecherskyi District Court of Kyiv had granted a request of the Prosecutor General’s Office of Ukraine to transfer to Ukraine’s Asset Recovery and Management Agency (ARMA) an unspecified percentage of corporate rights of 16 legal entities in Ukraine, including 49.5% of the corporate rights of Ferrexpo Poltava Mining. Ferrexpo Plc, Ferrexpo AG and Ferrexpo Poltava Mining (FPM) have still not received any official documentation or requests from the Ukrainian authorities with regards to the Court decision.
The SBI statement followed a separate press release made by the SBI twelve days earlier, in which the SBI said it was preparing to lodge a claim together with Ukraine’s Ministry of Justice to the High Anti-Corruption Court of Ukraine, requesting the nationalisation of certain assets and corporate rights of FPM.
These are the latest steps in a series of actions and decisions taken by Ukrainian State bodies and the Ukrainian courts adverse to the Ferrexpo Group. There are currently more than ten significant civil and criminal cases open against the Ferrexpo Group that have resulted, at different points in time, in the freezing of shares in all of Ferrexpo’s Ukrainian subsidiaries, the arrest of FPM’s railway wagon fleet, the freezing of FPM’s bank accounts and the detention of senior management personnel (including FPM’s General Director) with the Ferrexpo Group having to pay in excess of US$16 million in bails to secure their release.
Legal status
These actions and decisions are wholly without merit. They are contrary to Ukrainian law, and the underlying legal proceedings in Ukraine have been riddled with procedural defects and due process violations. Further, there is no reasonable nexus whatsoever between these actions and decisions against the Ferrexpo Group and the supposed aim of prosecuting cases against Mr Konstantin Zhevago. Ferrexpo’s subsidiaries in Ukraine are wholly owned by Ferrexpo AG; Mr Zhevago does not own any shares in those entities. Ferrexpo AG is run by its directors (which do not include Mr Zhevago), while Ferrexpo Plc is run by its directors (which do not include Mr Zhevago), for the benefit of its shareholders as a whole (which include many institutional investors, pension funds and private individuals).
UK-Ukraine BIT and Swiss-Ukraine BIT
The actions and conduct of Ukraine in relation to these cases constitute breaches of its obligations under the UK-Ukraine BIT and the Swiss-Ukraine BIT, including to accord Ferrexpo’s investment fair and equitable treatment and not to impair by unreasonable or discriminatory measures the management, maintenance, use, enjoyment or disposal of Ferrexpo’s investment.
In the circumstances, Ferrexpo Plc and Ferrexpo AG have been left with no option but to send to the Government of Ukraine a formal written notification of potential claims under the UK-Ukraine BIT and the Swiss-Ukraine BIT. The purpose of this notification is to explain how Ukraine’s actions constitute breaches of Ukraine’s obligations under the UK-Ukraine BIT and the Swiss-Ukraine BIT, to request that Ukraine procure the lifting and/or cessation of the unlawful actions, and to request the Government of Ukraine to enter into negotiations.
Further updates will be provided as and when appropriate.
