Yahoo Finance Ferrexpo cancels dividend at eleventh hour as legal action looms large
London-listed iron pellet producer Ferrexpo has cancelled its dividend three days before it was due to be paid out as it faces a near £100m lawsuit.
In a statement on the London Stock Exchange late this morning, the FTSE 250-listed firm said the 3.3 cents per share dividend will not be paid on 23rd February as a claim against one of Ferrexpo’s subsidiaries, Ferrexpo Poltava Mining (FPM) remains active.
The $125m (£98m) claim relates to money that is said to be owed to an unnamed creditor by Kostyantyn Zhevago, a Ukrainian billionaire and former owner for Ferrexpo.
On 30 January 2024, Ferrexpo filed a cessation appeal to the Supreme Court in Ukraine and an application to kill the case.
However, the company said: “Until the Supreme Court has considered the application there is a possible risk of enforcement, however, Ferrexpo is of the view that these claims are without merit and Ferrexpo has compelling arguments to vigorously defend its position.”
The claimant’s action alleges that Zhevago, who remains in France since his arrest at the Courchevel ski resort in December 2022, misappropriated funds from the now-liquidated Finances and Credit Bank, which he also owned.
Finances and Credit bank was founded in 1990 and by the size of assets it was considered one of the largest banks of Ukraine according to classification of National Bank of Ukraine.
The company is also facing several court cases or investigations by Ukrainian authorities trying to recover assets from Zhevago.
Ferrexpo’s board says it will “aim to resume its focus on shareholder returns at the appropriate time.”
A spokesperson for the company declined to comment further.
The company’s shares have fallen 47 per cent in the last year and are down 4.9 per cent today.
