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LONDON - Ferrexpo PLC (LSE:LON:FXPO), a leading iron ore pellet producer with mines in Ukraine, announced today that the Ukrainian tax authorities have decided to suspend the VAT refund for two of its subsidiaries, Ferrexpo Poltava Mining (FPM) and Ferrexpo Yeristovo Mining (FYM), for February 2025. The suspended amount totals approximately UAH 456.6 million (around US$ 11.1 million). This suspension follows a similar action taken for the VAT refund in January 2025, as disclosed on March 21, 2025.
The tax authorities’ decision is linked to personal sanctions against Kostiantyn Zhevago, but neither Ferrexpo nor its subsidiaries are directly targeted by these sanctions. Despite this, the company anticipates that future VAT refunds could be similarly withheld.
Ferrexpo has expressed its position that personal sanctions on Mr. Zhevago should not be leveraged to exert financial pressure on the company. The ongoing suspension of VAT refunds has significantly impacted Ferrexpo’s liquidity, leading to a production cut to 25% of its full capacity. The company has implemented extensive cost-saving measures, including workforce reductions and decreased mining and processing activities, as well as cuts in repairs, maintenance, capital expenditure, and social and humanitarian funding.
The company is actively engaging with Ukrainian authorities and international bodies to resolve the issue and alleviate the financial strain on its operations.
This information is based on a press release statement by Ferrexpo PLC.
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