Posted on 30 Jan 2024
Swiss-headquartered iron ore pellet producer Ferrexpo with assets in Ukraine says a Ukrainian court of appeal has confirmed a claim against its subsidiary Poltava Mining and Processing Plant (PGZK) totalling UAH 4.7 billion ($124 million).
PGZK rejects the decision and will file an appeal to the Supreme Court in Ukraine, the company tells Kallanish.
Earlier, the subsidiary received in 2022 a claim in respect of contested sureties. The claimant asserts that it acquired rights under certain loan agreements and alleges that PGZK provided sureties to ensure the performance of these obligations, the firm explains.
“In 2023, a court of first instance issued judgment in favour of the claimant. PGZK filed an appeal; nevertheless, the court of appeal has confirmed the claim,” Ferrexpo says. “The group remains of the view that the plant in Poltava has compelling arguments to defend its position in the Supreme Court.”
Ferrexpo's operations remain unaffected and a further announcement will be made as appropriate, it adds.
In 2023, the Supreme Court of Ukraine annulled a decision of the Northern Commercial Court of Appeal to invalidate the 2002 purchase by Ferrexpo affiliates of 40.19% of shares in PGZK (see Kallanish passim).
In 2002, companies related to the current owners of the plant – Eastcoast United Inc., Statex Corp., Newport Inc., Sayers Holdings Limited – purchased 40.19% of the shares of PGZK from four non-resident companies part of the VS Energy group.
In 2005, the former shareholders appealed to the court with a claim to invalidate the purchase and sale agreement. The dispute lasted for ten years, and in February 2015, the Supreme Economic Court of Ukraine supported the earlier decision of the Supreme Court and the position of PGZK, rejecting the plaintiffs’ claim.
However, at the end of 2020, the former shareholders of the plant again challenged this agreement in court. On 20 September 2022, the Court of Appeal of Kyiv invalidated the 2002 sale and purchase agreement. Ferrexpo, whose main shareholder is Konstantin Zhevago, appealed the decision.
In 2023, Ferrexpo produced 3.84 million tonnes of pellet, down 36% on-year, reflecting operational and logistical constraints throughout last year due to the war in Ukraine (see Kallanish passim). It however increased its commercial iron ore concentrate production by 147% to 307,000t.
Source:Kallanish
