January 31, 2020 / 7:41 AM / 17 days ago

Ukraine court freezes Ferrexpo unit's shareholding

(Reuters) - Iron ore pellet producer Ferrexpo Plc (FXPO.L) said on Friday a Ukrainian court has a put a restriction on the sale of 50.3% of its Swiss unit’s shareholding in Ferrexpo Poltava Mining (FPM), one of the London-listed company’s mining businesses in Ukraine.

Ferrexpo said it believes the temporary restriction is related to former Chief Executive Officer Kostyantin Zhevago and the Bank Finance and Credit business he owned until 2015.

Zhevago has been put on an international wanted list on suspected embezzlement at a lender formerly owned by him, Ukraine’s state prosecutor office said last month. The Ukrainian mogul had stepped down as Ferrexpo’s top boss in October on matters related to the bankrupt lender.

Reuters was unable to reach Zhevago for comment, while Ferrexpo declined to comment beyond its statement.

Ferrexpo’s Swiss unit, Ferrexpo AG Switzerland, has appealed the court order, it said.

Ferrexpo AG is a holding company focussing on the sale of iron ore pellets and is wholly owned by London-listed Ferrexpo, its 2018 annual report here shows. Ferrexpo AG in turn is the sole shareholder of Ferrexpo Poltava Mining.

Zhevago is the biggest shareholder in UK’s Ferrexpo with a 50.3% stake, Refinitiv Eikon data showed. He was appointed its CEO in 2008, and was also a member of the Ukrainian parliament between 1998 and 2019.

“Ferrexpo AG has no intention, and never has had any intention, to transfer its shareholding in FPM,” the pellet producer said in a statement, adding that its operations remain unaffected.

Ferrexpo’s UK shares fell as much as 5.4% but recouped some of those losses to trade 2.7% lower at 137 pence as of 0858 GMT.

Reporting by Pushkala Aripaka in Bengaluru; Editing by Saumyadeb Chakrabarty

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