REG - Ferrexpo plc - International Investment Agreements Notification

FerrexpoAnnouncement

19/03/2025 08:00

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RNS Number : 2735B  Ferrexpo PLC  19 March 2025

19 March 2025

Ferrexpo plc

("Ferrexpo" or the "Group")

 

Notification to Ukraine under international investment agreements

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.

 

For further information please contact:

 Ferrexpo:
 Nick Bias       n.bias@ferrexpo.com                                                     +44 (0)7733 177 831
                 (mailto:n.bias@ferrexpo.ch?subject=Ferrexpo%20contested%20securities)

 Tavistock:
 Jos Simson      ferrexpo@tavistock.co.uk (mailto:ferrexpo@tavistock.co.uk)              +44 (0)20 7920 3150
 Gareth Tredway                                                                          +44 (0)7785 974 264

 

About Ferrexpo

Ferrexpo is a Swiss headquartered iron ore company with assets in Ukraine and
a listing in the equity shares commercial companies category on the London
Stock Exchange (ticker FXPO) and a constituent of the FTSE 250 and FTSE4Good
indices. The Group produces high grade iron ore pellets, which are a premium
product for the global steel industry and enable reduced carbon emissions and
increased productivity for steelmakers when converted into steel, compared to
more commonly traded forms of iron ore. Ferrexpo's operations have been
supplying the global steel industry for over 50 years. Before Russia's
full-scale invasion of Ukraine in February 2022, the Group was the world's
third largest exporter of pellets. The Group has a global customer base
comprising of premium steel mills around the world. For further information,
please visit www.ferrexpo.com (http://www.ferrexpo.com) .

Notes to Editors:

About international investment agreements

An international investment agreement is an agreement between two or more
States (countries) which seeks to promote and protect private investments made
by nationals of those States in each other's territories. Some of these may be
bilateral (between two States) and are called bilateral investment treaties or
BITs, and others are multilateral (between a number of States). Protections
guaranteed in international investment agreements commonly include (among
others): fair and equitable treatment, non-impairment by unreasonable or
discriminatory measures, full protection and security, national treatment and
protection from unlawful expropriation. While these are State-to-State
agreements, they usually contain provisions allowing an investor from one
State to directly enforce the guarantees as to the treatment of their
investment against the host State through international arbitration before an
independent tribunal.

About the UK-Ukraine BIT and the Swiss-Ukraine BIT

Ukraine has entered into a number of international investment agreements,
including with the UK (the 1993 Agreement between the Government of the United
Kingdom of Great Britain and Northern Ireland and the Government of Ukraine
for the Promotion and Reciprocal Protection of Investments or the UK-Ukraine
BIT) and Switzerland (the 1995 Agreement between the Swiss Confederation and
Ukraine on the Promotion and Reciprocal Protection of Investments or the
Swiss-Ukraine BIT). The UK-Ukraine BIT and the Swiss-Ukraine BIT impose a
number of obligations on Ukraine as to the standard of treatment to be
afforded to protected investments made by UK and Swiss investors respectively
in Ukraine. These include (among others): (i) the obligation to accord fair
and equitable treatment to investments (Article 2(2) of the UK-Ukraine BIT and
Article 4(2) of the Swiss-Ukraine BIT, (ii) the obligation not to impair by
unreasonable or discriminatory measures the management, maintenance, use,
enjoyment or disposal of investments (Article 2(2) of the UK-Ukraine BIT and
Article 4(1) of the Swiss-Ukraine BIT, and (iii) the obligation not to
nationalise or expropriate investments except in certain limited circumstances
(which include payment of prompt, adequate and effective compensation)
(Article 6(1) of the UK-Ukraine BIT and Article 6(1) of the Swiss-Ukraine
BIT).

About written notifications under the BITs

The UK-Ukraine BIT and the Swiss-Ukraine BIT also provide UK and Swiss
investors respectively with the right to enforce the guarantees directly
against Ukraine through international arbitration before an independent
tribunal (Article 8 of the UK-Ukraine BIT and Article 9 of the Swiss-Ukraine
BIT).  Before commencing international arbitration, the UK-Ukraine BIT and
the Swiss-Ukraine BIT require the investor to send a written notification of a
potential claim. The purpose of such a written notification is to: (i) explain
the breach(es) of the obligation(s) under the BIT, and (ii) request
negotiations with the State and/or a resolution or a settlement. The action
taken by Ferrexpo today is to give such a formal written notification to
Ukraine under the UK-Ukraine BIT and the Swiss-Ukraine BIT.

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