REG - Ferrexpo plc - Update on funding options

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RNS Number : 4636B  Ferrexpo PLC  22 April 2026

22 April 2026

Ferrexpo plc

("Ferrexpo" or the "Company" or the "Group")

 

Update on funding options and potential equity capital raise

 

Ferrexpo plc (LSE: FXPO), a producer and exporter of premium iron ore
products, today announces an update in relation to a potential equity capital
raise to support the working capital position of the Group.

As announced on 20 April 2026, the Group remains focused on managing its costs
and optimising its sales mix and has recently entered into an agreement for
the sale of an owned transhipping vessel "Iron Destiny" for a total net cash
consideration of US$7.7 million. Taking into account the proceeds which will
be received from the sale of "Iron Destiny" at completion, which is expected
later this month, the Group reiterates that it has sufficient net accessible
cash until approximately the end of August 2026. This estimate remains subject
to volatility of iron ore pricing, operating expenses (including energy costs)
and in circumstances where there are no material changes to the operating
conditions of the Group, including energy supply, and no restrictive measures
are put in place by the insolvency manager appointed within Ferrexpo Poltava
Mining ("FPM") and there are no negative outcomes to the various proceedings
to which the Group is currently subject, as further set out in Appendix B to
this announcement.

Following the announcement on 20 April 2026, the Board believes that an equity
capital raise is currently the only viable solution in the timeframe required.
As announced on 20 April 2026, any such equity capital raise would likely be
structured as a conditional placing of new shares to existing and new
institutional investors to raise a minimum of US$100 million to support the
working capital position of the Group and meet the Group's short-term
operational requirements while operating at a reduced level for the next 18
months (the "Intended Fundraise").

Launch of the Intended Fundraise is subject to, amongst other things, Board
approval and market conditions. Completion of the Intended Fundraise would be
subject to, amongst other things, the approval of resolutions (the
"Resolutions") at a general meeting of shareholders to be convened as early as
possible following any launch of the Intended Fundraise (the "General
Meeting"). The Company does not intend to publish a prospectus in connection
with the Intended Fundraise.

As at the date of this announcement, engagement remains ongoing with the
Company's largest shareholder, Fevamotinico S.a.r.l. ("Fevamotinico"), which
currently holds 294,993,686 Ordinary Shares being 49.32 percent of the
existing Ordinary Shares in issue (excluding Ordinary Shares held in
treasury), as to whether Fevamotinico would provide support for the
Resolutions at the General Meeting. These discussions continue to be in
relation to the impact of any potential dilution of Fevamotinico's interests
in the Company as a result of the Intended Fundraise and Fevamotinico's
ongoing desire to participate in the Intended Fundraise. As part of these
discussions, the Board is mindful of the implications of the Group's
association with Kostiantyn Zhevago ("Mr Zhevago") (including the various
legal, fiscal, political and other risks arising from the Group's association
with Mr Zhevago, see further paragraph 1.2 (Corporate, sanctions and
cross-border regulatory matters) in Appendix B to this announcement) who is a
discretionary beneficiary (along with two other family members) of The Minco
Trust, which wholly owns Fevamotinico.

The Directors believe that, if the Intended Fundraise proceeds, it would
strengthen the Group's liquidity position and provide working capital to
support the continuation of operations during a period of ongoing operational
and financial constraint, as well as put the Group in a stronger financial
position to restore production capacity to a sustainable level with potential
for longer-term recovery. The Directors believe the net proceeds of the
Intended Fundraise would be sufficient to meet the Group's short-term
operational requirements while operating at a reduced level for the next 18
months and to continue as a going concern.

 

Planned timetable to launch the Intended Fundraise and impact of any delays

If the Board decides to proceed with the Intended Fundraise, the Company will
release a further announcement, including the full terms and conditions of the
proposed equity raise.

Should the Board proceed with the Intended Fundraise, it is currently expected
that such an equity raise will need to be launched and completed (conditional
on, amongst other things, approval of the Resolutions at the General Meeting
and admission of New Ordinary Shares to be issued in such equity raise to
listing and trading) on or prior to 30 April 2026 in order for the Company to
be able to issue its audited financial results for the year ended 31 December
2025.

Whilst the Board and its advisers are progressing the work required to achieve
the timetable set out above, in the event that the Intended Fundraise is not
launched and the bookbuild completed by no later than 30 April 2026, the
Company expects that its shares will be suspended from listing and trading
with effect from 07:30 (UK time) on 1 May 2026 until the audit is completed
and the 2025 Annual Report and Accounts are published, which itself will
require the execution of an appropriate funding solution in order for the
financial results to be prepared on a going concern basis.

In such a scenario, there can be no certainty as to the expected timing of the
lifting of the suspension of listing and resumption of trading of the
Company's shares, if at all.

At this stage there can be no certainty that the Group will be successful in
executing the Intended Fundraise, or any alternative funding solution, within
the timeframe set out above, or at all.

 

Summary Unaudited Results for the year ended 31 December 2025

Appendix C to this announcement contains summary unaudited, consolidated
financial statements for the year ended 31 December 2025.

These financial results are unaudited and remain subject to completion of the
Group's auditors' audit procedures as well as approval of the Company's Audit
Committee and the Board. As at the date of this announcement, these summary
unaudited, consolidated financial results have been prepared on a going
concern basis, however, such basis of preparation is contingent on the
successful completion of the Intended Fundraise.

Neither Appendix C to this announcement nor this announcement constitutes a
preliminary statement of annual results as contemplated by UKLR 6.1.5R, nor
statutory accounts under the Companies Act 2006.

 

Further information about the Intended Fundraise

Operational and financial context

The Group's operations have been significantly impacted since the commencement
of Russia's full-scale invasion of Ukraine in 2022. Throughout this period,
the Group's focus has been to manage its working capital and costs while
operating in a challenging environment. This has included, amongst other
things, reduced working time for employees, ongoing cuts in procurement of
goods and services, and the continued suspension of all non-essential capital
expenditure, overheads, and corporate social responsibility spending.

Access to Ukrainian Black Sea ports remained open for most of 2025, allowing
the Group to continue operating at a larger scale because of the ability to
transport its products by seaborne vessels. During 2025, the Group completed
its investments in adding concentrator lines in the beneficiation plant, which
allowed for the expanded production of concentrates, shipped on Cape size
vessels to customers in Asia, primarily to China. This pivot to a blend of
premium concentrates and pellets helped to keep the Group's mining and
processing operations operating at higher rates.

The benefit of operating at scale is threefold. First, from a social
perspective, more people are employed and more money flows into the local
community. Second, large fixed costs are spread over more units of production.
Third, the integrity of the Group's plant and equipment is maintained.

Throughout the ongoing war there have been sustained attacks on Ukraine's
energy grid and infrastructure. These attacks have affected the Group's
ability to remain in production on a continuous basis. Towards the end of
2025, the Group had to make the difficult decision to temporarily suspend
production to preserve cash. Into 2026, production has resumed but is still
limited to approximately one quarter of the Group's sustained pre-war
capacity.

Further, and arising from the Group's association with Mr Zhevago, as set out
below and in Appendix B to this announcement, the decision of the Ukrainian
tax authorities to suspend VAT refunds to the Group since March 2025 has had a
severe impact on Group liquidity and forced a further downscale in production,
and in turn led to lower levels of procurement for products and services from
its suppliers. The withholding of VAT refunds has continued in 2026 to date.
As at 31 March 2026, the Group's net VAT receivable balance in Ukraine was
US$90.3 million. Of this amount, as at date of this announcement, US$78.9
million had been claimed for refund from the Ukrainian tax authorities for the
period from January 2025 to March 2026, and US$69.4 million of the refunds
(representing the period from January to December 2025) were refused by the
tax authorities in Ukraine because of the association of the Group with Mr
Zhevago as a consequence of personal sanctions imposed on him by the Ukrainian
authorities.

Taking all of these operational factors into account, the Group's cash
position has decreased significantly to a net cash position of approximately
US$20 million as at 17 April 2026, and when excluding the Group's funds held
at MBaer Merchant Bank, which in February 2026 had its banking licence
revoked, the Group's net accessible cash was approximately US$17 million as at
17 April 2026. This compares to net cash positions of approximately US$25
million as at 31 March 2026, US$30 million as at 27 February 2026, US$47
million as at 31 December 2025, US$50 million as at 30 June 2025, and US$101
million as at 31 December 2024.

As a result, the Board has determined that, absent successful completion of
the Intended Fundraise, the Group only has sufficient net accessible cash
until approximately the end of August 2026, taking into account the proceeds
which will be received from the sale of "Iron Destiny" at completion, which is
expected later this month. This estimate remains subject to volatility of iron
ore pricing, operating expenses (including energy costs) and in circumstances
where there are no material changes to the operating conditions of the Group,
including energy supply, and no restrictive measures are put in place by the
insolvency manager appointed within FPM and there are no negative outcomes to
the various proceedings to which the Group is currently subject, as further
set out in Appendix B to this announcement. With the continuation of
withholding of VAT refunds to the Group, failure to complete the Intended
Fundraise could give rise to material negative consequences for the Group and
it is possible that Shareholders could lose the entire value of their
investment in the existing Ordinary Shares.

 

Background to and reasons for the Intended Fundraise

The Group is currently operating in a highly constrained environment, affected
by, among other things:

·    severe operational and financial risks arising from the war in
Ukraine, including a large number of its workforce serving in the Armed Forces
of Ukraine, disruptions to the supply of electricity and logistics
constraints, as a result of which the Group currently has only one pellet line
in operation;

·    the suspension by Ukrainian tax authorities of the payment of VAT
refunds;

·    the Group's principal operating subsidiary, FPM, being in bankruptcy
proceedings in connection with an ongoing civil claim against FPM in the
Ukrainian courts, see further paragraph 1.4 (The Group's principal operating
subsidiary is in bankruptcy proceedings in Ukraine and the Group may lose
control of it which could have a material adverse impact on the Group) in
Appendix A and paragraph 1.2.3 (Contested sureties claim) in Appendix B to
this announcement;

·    various legal, fiscal, political and other risks arising from the
Group's association with Mr Zhevago, see further paragraph 1.2 (Corporate,
sanctions and cross-border regulatory matters) in Appendix B to this
announcement;

·    various legal proceedings against members of the Group unrelated to
the Group's association with Mr Zhevago, see further Appendix B to this
announcement; and

·    broader legal and political uncertainties in Ukraine, which have been
exacerbated by the war and the current circumstances facing Mr Zhevago,
including the possibility of increased state involvement in the Group's
business in Ukraine, including the risk of nationalisation of certain of its
key operating assets.

The Group has suffered a substantial decrease in its cash reserves since the
start of the full-scale invasion of Ukraine in February 2022, significantly
worsening following the decisions of the Ukrainian tax authorities in March
2025 to suspend the payment of VAT refunds to the Group's Ukrainian
subsidiaries. As at 31 March 2026, the Group's net VAT receivable balance in
Ukraine was US$90.3 million. Of this amount, as at the date of this
announcement, US$78.9 million had been claimed for refund from the Ukrainian
tax authorities for the period from January 2025 to March 2026, and US$69.4
million of the refunds (representing the period from January to December 2025)
were refused by the tax authorities in Ukraine because of the association of
the Group with Mr Zhevago as a consequence of personal sanctions imposed on
him by the Ukrainian authorities.

 

The Group's association with Mr Zhevago

Mr Zhevago was the founder of the Group in its current form and served as
Chief Executive Officer of the Company from November 2008 to October 2019. He
remained on the Board as a non-executive director until December 2022.

Mr Zhevago is a discretionary beneficiary (along with two other family
members) of The Minco Trust, which wholly owns the Company's largest
shareholder, Fevamotinico. As at the date of this announcement, Fevamotinico
holds 294,993,686 Ordinary Shares being 49.32 percent of the existing Ordinary
Shares in issue (excluding Ordinary Shares held in treasury). Mr Zhevago is
considered by certain authorities in Ukraine to be the Company's ultimate
beneficial owner. For the avoidance of doubt, neither Mr Zhevago nor
Fevamotinico owns any shares in any of the subsidiaries within the Group.

Mr Zhevago does not currently perform any role on behalf of the Group and is
no longer a Director, employee, officer or consultant to any member of the
Group. However, given his historic connections with the Group and his position
as one of the beneficiaries of The Minco Trust (and the Group's ongoing
interaction with Mr Zhevago in such capacity), he is often publicly associated
with the Group by third parties, including the media, and has been and may
continue to be determined by Ukrainian courts, regulators, counterparties and
other stakeholders as being closely connected to the Group.

The Company has in place a relationship agreement with The Minco Trust,
Fevamotinico and Mr Zhevago (the "Relationship Agreement"), which was put in
place at the time of the Company's initial public offering on the London Stock
Exchange in 2007. Pursuant to the Relationship Agreement, each of
Fevamotinico, Mr Zhevago and The Minco Trust agree, amongst other things,
that:

·    they shall not take any action which precludes or inhibits the
Company from carrying on its business independently of Fevamotinico, The Minco
Trust and Mr Zhevago (or any of their associates) as required by the UK
Listing Rules;

·    transactions and arrangements between the Group, Fevamotinico, The
Minco Trust and Mr Zhevago (and each of their associates) shall be at arm's
length and on normal commercial terms; and

·    at all times a majority of the Directors of the Company shall be
independent of Fevamotinico, The Minco Trust and Mr Zhevago.

Under the Relationship Agreement, Mr Zhevago retains the right to appoint
himself as a Director of the Company, or another person as his representative
director, in each case in a non-executive capacity. Mr Zhevago also has
certain information rights relating to the Group under the Relationship
Agreement and the Group interacts with Mr Zhevago in relation to the exercise
of such rights. This director appointment right has not currently been
exercised by Mr Zhevago. Mr Ivan Zhevago (Mr Zhevago's son) attends board
meetings of the Company as a non-voting observer by agreement with the Board,
but does not attend any parts of those meetings in relation to any actual or
potential conflict of interest matters, and is not allowed to attend meetings
of any board committees of the Company. The Relationship Agreement would
terminate if Fevamotinico's shareholding reduces below 24.9% of the Company's
voting rights. It is not expected that the Intended Fundraise would result in
Fevamotinico's shareholding falling below this threshold and therefore the
Relationship Agreement will remain in place.

Allegations and legal proceedings relating to Mr Zhevago

Mr Zhevago is subject to a number of allegations and legal proceedings in
Ukraine and other jurisdictions, including the imposition of personal
sanctions in Ukraine and allegations of embezzlement, misappropriation of
funds and involvement in criminal activity (including bribery).

These allegations and the imposition of personal sanctions in Ukraine on Mr
Zhevago and his assets, together with the association between Mr Zhevago and
the Group, have, according to statements by the Ukrainian tax authorities and
other public reporting, contributed to various legal and enforcement actions
against and involving the Group's Ukrainian subsidiaries, including the
Ukrainian tax authorities suspending payment of VAT refunds, notwithstanding
that such entities are not owned by Mr Zhevago. See further paragraph 1.2 (The
Group is subject to various legal, fiscal, and political actions and is at
risk of future actions due to its association with Mr Zhevago) and paragraph
1.3 (The suspension of VAT refunds in Ukraine has materially constrained the
Group's liquidity) in Appendix A to this announcement.

Operational challenges, liquidity and cash position of the Group

The Group's cash position has been further materially affected by the ongoing
war in Ukraine, including recent significant and recurring electricity
shortages, materially disrupting the Group's production processes and
requiring the Group to import electricity from EU countries at significantly
higher prices. The Group temporarily suspended operations on 20 January 2026
as a result of disruptions to the supply of electricity, with only limited
resumption of operations at reduced capacity levels in late February 2026,
which has had a subsequent impact on the Group's cash flow generation.

In addition to power‑related issues, the broader wartime environment in
Ukraine has created further operational challenges for the Group, including
logistics and supply‑chain disruptions, increased input costs and labour
constraints due to conscription.

As a result of the above issues, the Group is currently operating at a loss,
with no current timeframe for full resumption of operations given the
continued uncertainty caused by the impacts of the war in Ukraine. See further
paragraph 1.6 (The Group faces severe operational and financial risks arising
from the war in Ukraine) in Appendix A of this announcement.

The Group's cash position has decreased significantly to a net cash position
of approximately US$20 million as at 17 April 2026, and when excluding the
Group's funds held at MBaer Merchant Bank, which in February 2026 had its
banking licence revoked, the Group's net accessible cash was approximately
US$17 million as at 17 April 2026. This compares to net cash positions of
approximately US$25 million as at 31 March 2026, US$30 million as at 27
February 2026, US$47 million as at 31 December 2025, US$50 million as at 30
June 2025, and US$101 million as at 31 December 2024. Notwithstanding the
Group's current liquidity constraints, aside from lease liabilities (the
majority of which relates to a long-term lease liability payable over ten
years), the Group does not have any outstanding interest-bearing loans or
borrowings.

The Group has implemented a number of significant cost-cutting measures. These
include materially reducing the scale of its business to only a quarter of its
full pellet production capacity (operating one of four pellet lines), placing
part of its workforce in Ukraine on furlough or reduced working hours (which
can vary depending on production levels and power interruptions), deferring
investment and maintenance programmes, significantly reducing procurement of
goods and services, and the continued suspension of all non-essential capital
expenditure, overheads and corporate social responsibility and humanitarian
spending. The Company has also explored the sale of one or more of its assets
to generate cash. As announced on 20 April 2026, the Company has entered into
an agreement for the sale of an owned transhipping vessel "Iron Destiny" for a
total net cash consideration of US$7.7 million. The sale of the Iron Destiny
vessel is expected to complete later this month. Notwithstanding these
measures, based on the current cash reserves, the Group's ongoing costs and
current reduced operational output, and taking into account the proceeds which
will be received from the sale of "Iron Destiny" at completion, without the
net proceeds of the Intended Fundraise or any other mitigating measures, the
Group only has sufficient net accessible cash resources until approximately
the end of August 2026. This estimate remains subject to volatility of iron
ore pricing, operating expenses (including energy costs) and in circumstances
where there are no material changes to the operating conditions of the Group,
including energy supply, and no restrictive measures are put in place by the
insolvency manager appointed within FPM and there are no negative outcomes to
the various proceedings to which the Group is currently subject, as further
set out in Appendix B to this announcement.

 

Current trading

The Group continues to operate under highly constrained conditions as a result
of the war in Ukraine and related operational and financial risks. Production
was temporarily suspended in January 2026 due to electricity supply
disruptions, with limited resumption in February 2026 following improvements
in the availability and price of electricity supply. The Group continues to
operate one of its four pellet lines and sell its products to European
customers. The Group has implemented further significant cost-control
measures, including reduced working hours, deferred capital expenditure, and
scaled-back procurement, while managing liquidity and operational priorities.

As at 17 April 2026, the Group's net cash position was approximately US$20
million, with net accessible cash of approximately US$17 million. Total
production for the first quarter of 2026 was 593 thousand tonnes, comprising
525 thousand tonnes of premium iron ore pellets and 68 thousand tonnes of Fe
67% premium iron ore concentrate.

 

Potential longer-term recovery

Notwithstanding the current constraints, the Directors believe the Group
retains significant longer-term recovery potential. The Directors currently
envisage recovery occurring across several phases, from near-term
stabilisation of operations and supply chains through to a broader production
staged ramp-up and, ultimately, full capacity restoration, with the timing of
each phase dependent on the evolution of the war in Ukraine and the Group's
broader operating environment in Ukraine, the restoration of the current VAT
refunds received by the Group, as well as a resolution for in part, or in
full, receipt of the Group's recorded net VAT receivable balance overdue from
the Ukrainian tax authorities, favourable outcomes in relation to a number of
the cases pending a hearing in the Ukrainian courts, as well as satisfying
additional capital requirements for longer-term growth.

The Group's target maximum production capacity is approximately 12 million
tonnes per annum, and the Directors expect a phased restoration of capacity
over a multi-year period as the Group's operating environment stabilises, with
an expected start of the recovery to pre-war levels in 2028. The Group also
retains longer-term growth optionality through Belanovo, a proximate
Greenfield deposit with a JORC Mineral Resource of 1.7 billion tonnes suitable
for the production of DR pellets, and upgrades to existing infrastructure and
operational, production and logistics processes.

 

Use of proceeds from the Intended Fundraise

The net proceeds of the Intended Fundraise would be used primarily to
strengthen the Group's liquidity position and support the continuation of
operations during a period of ongoing operational and financial constraint.

In particular, the Directors would apply the net proceeds of the Intended
Fundraise towards:

·    providing working capital to fund the Group's operating costs,
including power, labour, consumables, logistics and maintenance expenditure,
while operations continue at reduced levels; and

·    preserving financial flexibility in light of continued uncertainty
relating to the operating environment in Ukraine, including power supply
disruption, logistics constraints, legal proceedings and the ongoing
suspension of VAT refunds.

The net proceeds of the Intended Fundraise would be used to support the
working capital position of the Group and meet its short-term operational
requirements while operating at a reduced level for the next 18 months and to
continue as a going concern. The Directors believe that completion of the
Intended Fundraise would also put the Group in a stronger financial position
to support a longer-term staged restoration and stabilisation of production
capacity to sustainable levels; however, any such recovery is conditional on
stabilisation of the Group's operating environment, as well as satisfying
additional capital requirements for longer-term growth.

 

Importance of executing the Intended Fundraise

The Intended Fundraise will be conditional on, amongst other things, passing
of the Resolutions at the General Meeting. Therefore, if shareholder approval
is not obtained, or if any of the other conditions are not satisfied, the
Intended Fundraise will not proceed and the Group may not have the ability to
continue as a going concern.

The Directors have considered a range of funding options to generate working
capital and to identify alternative sources of liquidity to preserve the
viability of the Group and protect shareholder value. Such options include
raising debt capital or alternative bank financing facilities, negotiating
amendments to payment terms with suppliers and customers, entering into trade
financing arrangements, implementing care-and-maintenance measures, exploring
asset disposals, procuring strategic investment by one or more third parties
and other equity capital options. In relation to certain of these options:

·    The Company could seek debt funding, through raising debt capital or
entering into alternative bank financing facilities. However, the personal
sanctions imposed on Mr Zhevago and his assets by the Ukrainian authorities
(which are specific to Ukraine and do not constitute sanctions imposed by the
UK, the US, the EU or any other international authorities), together with
other ongoing legal actions against and involving the Group in Ukraine, has
had and continues to have a material adverse impact on the Group's ability to
access financing and banking arrangements. Lenders, financial institutions and
other counterparties have previously been unwilling or unable to provide
funding or banking facilities to the Group due to concerns regarding Ukrainian
sanctions compliance, anti-money laundering requirements and "Know Your
Customer" (KYC) obligations arising from the Group's association with Mr
Zhevago, and without a change in the Ukrainian sanctions position or material
dilution of Fevamotinico's shareholding in the Company, this is not expected
to change. Further, the Group is unable at this time to offer meaningful
security to support any external financing as a result of the arrest
(freezing) orders which have been placed over various assets of the Group
(including shareholdings in Ferrexpo AG and the Group's Ukrainian
subsidiaries) and the ongoing bankruptcy proceedings in relation to FPM, which
further materially limits the availability of debt financing on acceptable
terms. Additionally, due to frequent interruptions in production and at times
limited access to export infrastructure, such as the Ukrainian Black Sea and
Danube ports, the Group is not able to guarantee a sustainable export sales
income necessary to service debt repayments. The Group is in discussions with
certain of its customers and suppliers about potential amendments to payment
terms to assist its cash flow, but there is no guarantee that such amendments
would be accepted or persist. Furthermore, the Group is currently negotiating
a non-binding term sheet for a potential trade financing arrangement but there
can be no assurance that such arrangement will be finalised or entered into,
and even if such arrangement can be concluded, it is expected that it would be
conditional upon successful completion of the Intended Fundraise.

·    The Company has also considered whether to implement further
care-and-maintenance measures for the Group's assets including placing
employees on reduced working time or furlough, the suspension of all
non-essential capital expenditure, cuts to the Group's repair and maintenance
programme and its mining operations, in each case with a view to preserving
cash pending a resumption of normal operating conditions. However, such
measures would materially reduce operational flexibility, result in a skills
outflow which would limit capacity growth, and result in significant
additional costs, both in placing assets into care and maintenance and
subsequently recommissioning them, and would not be capable of providing the
short-term liquidity required to preserve the viability of the Group.

·    The Company could consider selling one or more of its assets to
generate cash, including operating equipment and materials. However, the
Group's principal operating subsidiary (FPM) being in bankruptcy proceedings
and the appointment of an insolvency manager means that consent of the
insolvency manager is required for certain transactions, including the
granting of new encumbrances and making material disposals. See further
paragraph 1.4 (The Group's principal operating subsidiary is in bankruptcy
proceedings in Ukraine and the Group may lose control of it which could have a
material adverse impact on the Group) in Appendix A and paragraph 1.2.3
(Contested sureties claim) in Appendix B to this announcement. Furthermore,
the ongoing geopolitical situation in Ukraine, including the impact of the
war, as well as ongoing legal, fiscal and regulatory actions involving the
Group, including those arising from its association with Mr Zhevago, and the
restrictions imposed on certain of the Group's assets in connection with such
actions, materially restrict the Group's ability to dispose of its assets. For
any assets which could be disposed of, there is limited near-term visibility
on the availability of buyers or acceptable valuations for any such disposals,
and the time required to identify a potential buyer, negotiate and document
any sale terms and complete any such transaction (taking into account also any
regulatory approvals required for such transaction) would likely exceed the
period during which the Company is expected to have sufficient liquidity. In
addition, the Company believes a further sale of some or all of its assets
would impact the Group's future revenue and its ability to remain a viable
concern.

The Directors do not believe there is a realistic prospect of the Company
being able to raise sufficient cash proceeds from any of such alternative
options prior to the Group's cash shortfall, which is expected to occur at
approximately the end of August 2026. This estimate remains subject to
volatility of iron ore pricing, operating expenses (including energy costs)
and in circumstances where there are no material changes to the operating
conditions of the Group, including energy supply, and no restrictive measures
are put in place by the insolvency manager appointed within FPM and there are
no negative outcomes to the various proceedings to which the Group is
currently subject, as further set out in Appendix B to this announcement.

While such alternative options may provide a limited extension of the Group's
liquidity, the effect of implementing these alternative options would be
limited and not sufficient to offset negative effects from adverse changes to
the Group's operating environment, may be detrimental to the Group's
longer-term prospects and highly unlikely to deliver a better outcome for
Shareholders than the Intended Fundraise. The Directors believe that the
Intended Fundraise is currently the only viable solution capable of
implementation in the timeframe required to meet the Group's ongoing
obligations and provide sufficient working capital for the Group's short-term
operational requirements while operating at a reduced level for the next 18
months and to continue as a going concern.

 

Implications if the Intended Fundraise does not successfully complete

If the Intended Fundraise does not proceed for any reason, including if the
Resolutions are not passed by Shareholders at the General Meeting, based on
the Group's current cash reserves, ongoing costs and current reduced
operational output, and taking into account the proceeds which will be
received from the sale of "Iron Destiny" at completion, which is expected
later this month, the Group only has sufficient net accessible cash to operate
until approximately the end of August 2026. This estimate remains subject to
volatility of iron ore pricing, operating expenses (including energy costs)
and in circumstances where there are no material changes to the operating
conditions of the Group, including energy supply, and no restrictive measures
are put in place by the insolvency manager appointed within FPM and there are
no negative outcomes to the various proceedings to which the Group is
currently subject, as further set out in Appendix B to this announcement.

As such, absent successful completion of the Intended Fundraise, the Group's
operating subsidiaries would face a cash shortfall at this time and as a
result the Group may be unable to continue as a going concern. The Directors
believe that in such circumstances, absent the recovery of VAT refunds (which
is outside the control of the Company), it is highly likely that the Company
or members of the Group would have no option but to file for insolvency in the
relevant jurisdictions and Shareholders may lose all or a substantial portion
of their investment. Should the non-completion of the Intended Fundraise
result in the Company breaching the UK Listing Rules or the Disclosure
Guidance and Transparency Rules of the FCA, the Company could face penalties
from the FCA ranging from fines or public censure to a suspension or
cancellation of the Company's listing.

 

Conclusion

The Directors believe that the Intended Fundraise is currently the only viable
solution capable of implementation in the timeframe required to meet the
Group's ongoing obligations and provide sufficient working capital for the
Group's short-term operational requirements while operating at a reduced level
for the next 18 months and to continue as a going concern.

If the Company does not launch the Intended Fundraise or Shareholders do not
approve the Resolutions at the General Meeting, the Intended Fundraise will
not proceed. In this situation, the Company would have to seek other forms of
emergency funding and is unable to provide any assurance that alternative
financing could be secured both in terms of timing and quantum to the Group's
requirements. The failure to secure the required funding on commercially
acceptable terms or at all will have a material adverse effect on the Group's
business, results of operations, financial condition, prospects, capital
resources, cash flows, share price, liquidity, results and/or future
operations. Without reasonable prospect of future funding in the short-term,
the likelihood of the Company continuing to operate will be severely reduced
and it is highly likely that the Company would have no option but to file for
insolvency in the relevant jurisdictions and Shareholders may lose all or a
substantial portion of their investment.

 

Update on discussions with Ukrainian authorities

The successful completion of the Intended Fundraise and resolving short-term
liquidity issues for the Group is expected to provide the Group with
additional time to allow the Board to continue focusing its efforts on
resolving the issues in Ukraine. This is expected to include continuing the
dialogue with relevant authorities in Ukraine with the aim of addressing the
issues facing the Group and seeking to potentially unlock the payment of VAT
refunds (and the Group has recently confirmed to Ukrainian authorities that
any VAT refund proceeds will be utilised by FPM and FYM within the territory
of Ukraine and will not be distributed as dividends to any sanctioned
individuals). The Group has filed an appeal and is currently awaiting the
outcome of decisions in the Ukrainian courts in relation to the contested
sureties claim, as further described below and in Appendix A and Appendix B to
this announcement, and may explore other solutions in connection with the
bankruptcy proceedings relating to FPM.

The Group's longer-term recovery potential is subject to material uncertainty,
including the successful launch and completion of the Intended Fundraise, the
ability to reclaim VAT refunds on a continuing basis (and recovering withheld
VAT refunds), the resolution of the war in Ukraine and raising additional
capital (beyond the net proceeds of the Intended Fundraise) to fund growth
opportunities of the Group in the longer term. See further Appendix A to this
announcement.

 

Principal Risks to the Group and the Intended Fundraise

Appendix A to this announcement contains certain risks considered by the
Company and the Board to be material risks in relation to the Group, including
in respect of litigation proceedings and other disputes or investigations to
which the Group is party (as further set out in Appendix B to this
announcement) and the Intended Fundraise.

 

Update on legal proceedings against members of the Group

Appendix B to this announcement contains additional information in relation to
certain litigation proceedings and other disputes or investigations to which
the Group is party, as at the date of this announcement.

Further to the Company's announcement on 24 February 2026, the next hearing of
the Supreme Court of Ukraine in relation to the contested sureties claim is
scheduled for 1 May 2026. A hearing for FPM's appeal against the opening of
related bankruptcy proceedings is scheduled to take place on 30 April 2026.
For further details on each of these proceedings, see paragraph 1.2.3
(Contested sureties claim) in Appendix B to this announcement.

The information in Appendix B to this announcement provides an overview of the
material litigation, investigations and regulatory proceedings involving the
Group. This section summarises those proceedings considered by the Company to
be material to Shareholders, however, in addition the Group is also party
(including as a claimant) to litigation and disputes in the ordinary course of
its business which is not described in Appendix B to this announcement.

The Group is subject to a range of material ongoing criminal, civil and
tax-related proceedings, mostly in Ukraine. A number of these proceedings
relate directly or indirectly to the Group's association with Mr Zhevago,
including as a result of allegations of embezzlement against Mr Zhevago
relating to the collapse of Bank Finance & Credit ("Bank F&C") and
other alleged criminal conduct (including bribery). These matters include:

·    the suspension of VAT refunds to the Group's Ukrainian subsidiaries
as a result of personal sanctions imposed on Mr Zhevago and his assets in
Ukraine. The continued non-receipt of VAT refunds has had, and is expected to
continue to have, a material adverse impact on the Group's cash flow
generation and liquidity - see paragraph 1.4.3 (VAT disputes with the State
Tax Service of Ukraine) in Appendix B to this announcement;

·    court-ordered arrests (freezes) being placed over certain shares and
assets in the Group's Ukrainian subsidiaries, which prevent the disposal of
arrested shares and in certain cases prohibit the voting of such shares:

o  some arrests relate to proceedings against Mr Zhevago which have been
concluded and where the arrest has moved to an enforcement stage, thereby
creating a more immediate risk of such assets being forcibly sold in the
enforcement proceedings - see paragraph 1.2.2 (Enforcement proceedings
relating to restrictions on certain corporate rights in principal Ukrainian
operating subsidiaries in connection with claim against Mr Zhevago relating to
Bank F&C personal surety) in Appendix B to this announcement; and

o  other of these arrests have been imposed in connection with ongoing
proceedings against Mr Zhevago, and therefore have been imposed as a
preventative measure to prevent disposal of the arrested assets pending an
outcome in such proceedings but are not yet able to be enforced - see
paragraph 1.2.1 (Restrictions on certain corporate rights in all of the
Group's Ukrainian subsidiaries in connection with the Bank F&C
investigation) in Appendix B to this announcement;

·    a civil claim relating to contested surety agreements between FPM and
Bank F&C, pursuant to which the claimant, Maxi Capital, is seeking
recovery of approximately US$111.5 million (as at exchange rate at 31 December
2025) from FPM - see paragraph 1.2.3 (Contested sureties claim) in Appendix B
to this announcement. This claim is subject to an appeal in the Supreme Court
of Ukraine and, pending the outcome of this appeal, the Supreme Court has
suspended the enforcement of the decisions of the court of appeal and the
court of first instance. However, notwithstanding that the underlying claim
remains under review by the Supreme Court of Ukraine and the suspension of
enforcement, bankruptcy proceedings against FPM have been opened by a court of
first instance in Ukraine at the request of Maxi Capital and an insolvency
manager has been appointed - see paragraph 1.2.3 (Contested sureties claim) in
Appendix B to this announcement.

The Group, and certain of its management personnel in Ukraine, are also
subject to criminal and civil claims and investigations in Ukraine relating
to:

·    alleged underpayment of royalties - see paragraph 1.1.1 (Underpayment
of iron ore royalties claims by the State Tax Service of Ukraine and the
Office of the Prosecutor General) in Appendix B to this announcement;

·    the use of mining by-products and alleged illegal mining - see
paragraph 1.1.2 (Investigations by the SBI in Ukraine and the National Police
of Ukraine regarding the use of waste product by FPM and alleged illegal
extraction of minerals) in Appendix B to this announcement;

·    environmental compliance matters - see paragraphs 1.1.3 (Claims by
the State Ecological Inspection relating to alleged violations of
environmental rules), 1.1.4 (Criminal investigations by the National Police of
Ukraine relating to alleged environmental violations) and 1.1.5 (Criminal
investigations by the National Police of Ukraine relating to alleged water
pollution) in Appendix B to this announcement; and

·    tax disputes, including relating to transfer pricing matters - see
paragraph 1.4 (Tax and transfer pricing matters) in Appendix B to this
announcement.

Whilst many of these proceedings are at an early stage, some of the claims
involve significant sums (see in particular the claim for illegal mining in
the amount of UAH157 billion (approximately US$3.7 billion as at as at
exchange rate at 31 December 2025)), some have involved the arrest (freeze) of
bank accounts and assets belonging to the Group and over the last three years
the Group has paid approximately US$16.2 million in bail payments to secure
the release of its senior management personnel in Ukraine from detention.

The Group disputes many of these proceedings and continues to vigorously
defend its position, However, the scale, complexity and number of proceedings,
together with the legal, political and economic environment in Ukraine, gives
rise to a heightened degree of uncertainty and may adversely affect the
Group's financial condition, operations and, in certain circumstances, its
ability to continue as a going concern.

The Group has also notified the Ukrainian state of potential treaty claims
where it alleges that conduct of Ukraine in respect of the Group has violated
Ukraine's obligations under certain international investment agreements - see
paragraph 1.6 (International treaty claims) in Appendix B to this
announcement.

 

Company Presentation

The Company has prepared a company presentation to provide existing
Shareholders and potential new institutional investors with information about
the Company which could be relevant to the Intended Fundraise. A copy of the
presentation will shortly be available on the Company's website at
https://www.ferrexpo.com/investors/results-reports-and-presentations/

 

Further announcements will be made as and when appropriate.

 

This announcement contains inside information. The person responsible for the
release of this announcement is Mark Gregory, Group Company Secretary.

 

For further information, please contact:

 Ferrexpo:
                                                                              via Tavistock
 Tavistock:
 Jos Simson       ferrexpo@tavistock.co.uk (mailto:ferrexpo@tavistock.co.uk)  +44 (0)7899 870 450

 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 All Share and
FTSE4Good indices. The Group produces premium grade iron ore products sold to
the global steel industry and enabling steel makers to reduce carbon emissions
and increase productivity. Ferrexpo's operations have been supplying the
global steel industry for over 50 years with a customer base comprising of
premium steel mills around the world. For further information, please visit
www.ferrexpo.com (http://www.ferrexpo.com) .

Disclaimers:

This announcement does not contain or constitute an offer for the sale of
securities, nor the solicitation of an offer to purchase or subscribe for
securities, in any jurisdiction. This announcement can neither be relied on
for any investment contract or decision, nor should its contents be construed
as legal, business or tax advice.

This announcement does not contain or constitute an offer for the sale of
securities, nor the solicitation of an offer to purchase securities, in
jurisdictions where such an offer or solicitation would be unlawful, including
the United States, Australia, Canada, Japan or the Republic of South Africa.
The securities referred to herein have not been and will not be registered
under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"),
or under the securities laws of, or with any securities regulatory authority
of any state or other jurisdiction of the United States and may not be
offered, sold, resold, or delivered, directly or indirectly, in or into the
United States absent registration under the U.S. Securities Act or pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the U.S. Securities Act and in compliance with any applicable
securities laws of any state or any other jurisdiction of the United States.
There has been and will be no public offer of securities in the United States.

Information relating to Mr Zhevago in this announcement is based on publicly
available information and the knowledge of the Company.

Forward Looking Statements:

This announcement includes forward-looking statements. By their nature, these
forward-looking statements involve known and unknown risks and uncertainties,
many of which are beyond the Group's control and all of which are based on the
Group's current beliefs and expectations about future events. Forward-looking
statements are sometimes identified using forward-looking terminology such as
"believe", "expects", "may", "will", "could", "should", "shall", "risk",
"intends", "estimates", "aims", "plans", "predicts", "continues", "assumes",
"positioned", "anticipates" or "targets" or the negative thereof, other
variations thereon or comparable terminology. These forward-looking statements
include all matters that are not historical facts. They appear in several
places throughout this announcement and include statements regarding the
intentions, beliefs or current expectations of the Group concerning, among
other things, the future results of operations, financial condition,
prospects, growth, strategies, objectives and dividend policy of the Group and
the industry and the jurisdictions in which it operates. These forward-looking
statements and other statements contained in this announcement regarding
matters that are not historical facts involve predictions and uncertainties
about future events. No statement included in this announcement is intended to
be a profit forecast.

No assurance can be given that such future results will be achieved; actual
events, performance or results may differ materially because of risks and
uncertainties facing the Group. Such risks and uncertainties could cause
actual results to vary materially from the future results indicated,
expressed, or implied in such forward-looking statements. These risks and
uncertainties include, but are not limited to, macroeconomic conditions,
geopolitical developments, regulatory and legal changes, operational and
safety risks, supply chain disruption, changes in market demand, foreign
exchange movements, availability of financing, the actions of competitors,
counterparties and governmental authorities, natural disasters, adverse
weather conditions, cyber risks and other factors beyond the Group's control.

Such forward-looking statements contained in this announcement relate only as
of the date of this announcement. The Group expressly disclaims any obligation
or undertaking to update these forward-looking statements contained in this
announcement to reflect any change in its expectations or any change in
events, conditions, or circumstances on which such statements are based unless
required to do so by applicable law, the UK Listing Rules, the Disclosure
Guidance and Transparency Rules of the FCA or the UK Market Abuse Regulation.

Since February 2022, the Group has managed to continue its operations during a
time of war. The ongoing war poses a threat to the Group's mining, processing
and logistics operations and, in addition, operations in the developing
political, fiscal and legal environment in Ukraine, heightening the risks
associated specifically with the dynamic and adverse legal system in Ukraine,
both represent a material uncertainty in terms of the Group's ability to
continue as a going concern. Some of the identified uncertainties in terms of
the Group's going concern are outside of the Group management's control.

Exchange Rate:

Unless otherwise specified by reference to a subsequent date, amounts in
Appendix A, Appendix B and Appendix C to this announcement are stated in US
dollars (US$) have been converted from Ukrainian hryvnia (UAH) using the
exchange rate of UAH42.388 - US$1.00 as at 31 December 2025.

Except as set out above, amounts in this announcement are stated in US dollars
(US$) have been converted from Ukrainian hryvnia (UAH) using the exchange
rates of UAH44.100 - US$1.00 as at 21 April 2026 and UAH43.796 - US$1.00 for
the balances as at 31 March 2026.

 

APPENDIX A

Principal Risks to the Group and the Intended Fundraise

 

This section describes the risk factors considered by the Directors to be
material risk factors in relation to the Group in connection with the Intended
Fundraise.

The risks described below are not the only risks faced by the Group.
Additional risks not presently known to the Directors or that the Directors
currently deem immaterial may also, whether individually or collectively, have
a material adverse effect on the Group's business, financial condition,
operations, cash flows or prospects, and could negatively affect the price of
the Ordinary Shares.

The information included herein is based on information available as at the
date of this announcement and, except as required by the UK Listing Rules, UK
Market Abuse Regulation, the Disclosure Guidance and Transparency Rules or any
other applicable law or regulation, will not be updated.

Any forward-looking statements are made subject to the reservations specified
within the disclaimers set out in this announcement.

 

1.     Risks relating to the Group's business and industry

1.1     The Group is expected to only have sufficient net accessible cash
until approximately the end of August 2026 and, with the continuation of
withholding of VAT refunds to the Group, the absence of completing the
Intended Fundraise could give rise to material negative consequences for the
Group and it is possible that Shareholders could lose the entire value of
their investment in the existing Ordinary Shares

The Group is currently operating in a highly constrained environment, affected
by, among other things: severe operational and financial risks arising from
the war in Ukraine, including a large portion of its workforce serving in the
Armed Forces of Ukraine, disruptions to the supply of electricity, and
logistical constraints, as a result of which it currently has only one pellet
line in operation; the suspension by Ukrainian tax authorities of the payment
of VAT refunds; the Group's principal operating subsidiary FPM being in
bankruptcy proceedings; various legal, fiscal, political and other risks
arising from its association with Mr Zhevago, various legal proceedings
against members of the Group unrelated to the Group's association with Mr
Zhevago, and broader legal and political uncertainties in Ukraine, including
the possibility of increased state involvement in the Group's business in
Ukraine, including the risk of nationalisation of certain of its assets.

The Group has suffered a substantial decrease in cash reserves since the start
of the full-scale invasion of Ukraine in February 2022, significantly
worsening since the decisions of the Ukrainian tax authorities in March 2025
to suspend the payment of VAT refunds to the Group's Ukrainian subsidiaries.
As at 31 March 2026, the Group's net VAT receivable balance in Ukraine was
US$90.3 million. Mr Zhevago, a discretionary beneficiary (along with two other
family members) of The Minco Trust, which wholly owns the Company's largest
shareholder, Fevamotinico, is considered by certain authorities in Ukraine to
be the Company's ultimate beneficial owner. Fevamotinico holds 49.32 percent
of the existing Ordinary Shares in issue (excluding Ordinary Shares held in
treasury). Mr Zhevago is subject to a number of allegations and legal
proceedings in Ukraine and other jurisdictions, including allegations of
embezzlement, misappropriation of funds and involvement in criminal activity
(including bribery). These allegations and the imposition of personal
sanctions in Ukraine on Mr Zhevago and his assets, together with the
association between Mr Zhevago and the Group, have contributed to various
legal and enforcement actions involving the Group's Ukrainian subsidiaries,
including the Ukrainian tax authorities suspending payment of VAT refunds. See
further paragraph 1.2 (The Group is subject to various legal, fiscal, and
political actions and is at risk of future actions due to its association with
Mr Zhevago) and paragraph 1.3 (The suspension of VAT refunds in Ukraine has
materially constrained the Group's liquidity) of this Appendix A.

In addition to the above, the Group is currently involved in a number of legal
and administrative proceedings in Ukraine, including, among other matters, a
civil claim in the amount of UAH157 billion (approximately US$3.7 billion)
relating to alleged illegal mining of sub-soil. See further paragraph 1.7
(Legal proceedings and judicial risk in Ukraine may result in material adverse
outcomes, restrictions and enforcement actions for the Group and could
threaten the future viability of the Group) of this Appendix A.

The Group's cash reserves have been further materially affected by the ongoing
war in Ukraine, including significant and recurring electricity shortages,
materially disrupting the Group's production processes and requiring the Group
to import electricity from EU countries at significantly higher prices. The
Group temporarily suspended operations on 20 January 2026 as a result of
disruptions to the supply of electricity, with only limited resumption of
operations at reduced capacity levels in late February 2026. In addition to
power‑related issues, the broader wartime environment has created further
operational challenges for the Group, including logistics and supply‑chain
disruptions, increased input costs and labour constraints due to conscription.
The Group is currently operating at a loss, with no current timeframe for full
resumption of operations as a result of the continued uncertainty caused by
the impact of the war in Ukraine. See further paragraph 1.6 (The Group faces
severe operational and financial risks arising from the war in Ukraine) of
this Appendix A.

As a result, the Group's cash position has decreased significantly to a net
cash position of approximately US$20 million as at 17 April 2026, and when
excluding the Group's funds held at MBaer Merchant Bank, which in February
2026 had its banking licence revoked, the Group's net accessible cash was
approximately US$17 million as at 17 April 2026. This compares to net cash
positions of approximately US$25 million as at 31 March 2026, US$30 million as
at 27 February 2026, US$47 million as at 31 December 2025, US$50 million as at
30 June 2025, and US$101 million as at 31 December 2024. Notwithstanding the
Group's current liquidity constraints, aside from lease liabilities (the
majority of which relates to a long-term lease liability payable over ten
years), the Group does not have any outstanding interest-bearing loans or
borrowings.

The Group has implemented a number of significant cost-cutting measures. These
include materially reducing the scale of its business to only a quarter of its
full pellet production capacity (operating one of four pellet lines), placing
part of its workforce in Ukraine on furlough or reduced working hours (which
can vary depending on production levels and power interruptions), deferring
investment and maintenance programmes, significantly reducing procurement of
goods and services, and the continued suspension of all non-essential capital
expenditure, overheads and corporate social responsibility and humanitarian
spending. The Company has also explored the sale of one or more of its assets
to generate cash. On 20 April 2026, the Group announced that it has entered
into an agreement for the sale of an owned transhipping vessel "Iron Destiny"
for a total net cash consideration of US$7.7 million. The sale of the Iron
Destiny vessel is expected to complete later this month. Notwithstanding these
measures, based on the current cash reserves, the Group's ongoing costs and
current reduced operational output, and taking into account the proceeds which
will be received from the sale of "Iron Destiny" at completion, without the
net proceeds of the Intended Fundraise or any other mitigating measures, the
Group only has sufficient net accessible cash resources until approximately
the end of August 2026, subject to volatility of iron ore pricing, operating
expenses (including energy costs) and in circumstances where there are no
material changes to the operating conditions of the Group, including energy
supply, and no restrictive measures are put in place by the insolvency manager
appointed within FPM and there are no negative outcomes to the various
proceedings to which the Group is currently subject.

The Intended Fundraise will be conditional on all of the Resolutions being
passed by Shareholders at the General Meeting. Therefore, if all of the
Resolutions are not passed by Shareholders, or if any of the other conditions
are not satisfied, the Intended Fundraise will not proceed.

The Directors have considered a range of options to generate working capital
and to identify alternative sources of liquidity to preserve the viability of
the Group and protect shareholder value. Such options include raising debt
capital or alternative bank financing facilities, negotiating amendments to
payment terms with suppliers and customers, entering into trade financing
arrangements, implementing care-and-maintenance measures, exploring asset
disposals, procuring strategic investment by one or more third parties and
other equity capital options. In relation to certain of these options:

·    The Company could seek debt funding, through raising debt capital or
entering into alternative bank financing facilities. However, the sanctions
imposed on Mr Zhevago and his assets by the Ukrainian authorities (which are
specific to Ukraine and do not constitute sanctions imposed by the UK, the US,
the EU or any other international authorities), together with other ongoing
legal actions against and involving the Group in Ukraine, has had and
continues to have a material adverse impact on the Group's ability to access
financing and banking arrangements. Lenders, financial institutions and other
counterparties have previously been unwilling or unable to provide funding or
banking facilities to the Group due to concerns regarding sanctions
compliance, anti-money laundering requirements and "Know Your Customer" (KYC)
obligations arising from the Group's association with Mr Zhevago and without a
change in the Ukrainian sanctions position or material dilution of
Fevamotinico's shareholding in the Company, this is not expected to change.
Further, the Group is unable at this time to offer meaningful security to
support any external financing as a result of the arrest (freezing) orders
which have been placed over various assets of the Group (including
shareholdings in Ferrexpo AG and the Group's Ukrainian subsidiaries) and the
ongoing bankruptcy proceedings in relation to FPM, which further materially
limits the availability of debt financing on acceptable terms. Additionally,
due to frequent interruptions in production and at times limited access to
export infrastructure, such as the Ukrainian Black Sea and Danube ports, the
Group is not able to guarantee a sustainable export sales income necessary to
service debt repayments. The Group is in discussions with certain of its
customers and suppliers about potential amendments to payment terms to assist
its cash flow, but there is no guarantee that such amendments would be
accepted or persist. Furthermore, the Group is currently negotiating a
non-binding term sheet for a potential trade financing arrangement but there
can be no assurance that such arrangement will be finalised or entered into,
and even if such arrangement can be concluded, it is expected that it would be
conditional upon successful completion of the Intended Fundraise.

·    The Company has also considered whether to implement further
care-and-maintenance measures for the Group's assets including placing
employees on reduced working time or furlough, the suspension of all
non-essential capital expenditure, cuts to the Group's repair and maintenance
programme and its mining operations, in each case with a view to preserving
cash pending a resumption of normal operating conditions. However, such
measures would materially reduce operational flexibility, result in a skills
outflow which would limit capacity growth, and result in significant
additional costs, both in placing assets into care and maintenance and
subsequently recommissioning them, and would not be capable of providing the
short-term liquidity required to preserve the viability of the Group.

·    The Company could consider selling one or more of its assets to
generate cash, including operating equipment and materials. However, the
Group's principal operating subsidiary (FPM) being in bankruptcy proceedings
and the appointment of an insolvency manager means that consent of the
insolvency manager is required for certain transactions, including the
granting of new encumbrances and making material disposals. Furthermore, the
ongoing geopolitical situation in Ukraine, including the impact of the war, as
well as ongoing legal, fiscal and regulatory actions involving the Group,
including those arising from its association with Mr Zhevago, and the
restrictions imposed on certain of the Group's assets in connection with such
actions, materially restrict the Group's ability to dispose of its assets. For
any assets which could be disposed of, there is limited near-term visibility
on the availability of buyers or acceptable valuations for any such disposals,
and the time required to identify a potential buyer, negotiate and document
any sale terms and complete any such transaction (taking into account also any
regulatory approvals required for such transaction) would likely exceed the
period during which the Company is expected to have sufficient liquidity. In
addition, the Company believes a further sale of some or all of its assets
would significantly impact the Group's future revenue and its ability to
remain a viable concern.

The Directors do not believe there is a realistic prospect of the Company
being able to raise sufficient cash proceeds from any of such alternative
options prior to the Group's cash shortfall, which is expected to occur at
approximately the end of August 2026, subject to volatility of iron ore
pricing, operating expenses (including energy costs) and in circumstances
where there are no material changes to the operating conditions of the Group,
including energy supply, and no restrictive measures are put in place by the
insolvency manager appointed within FPM and there are no negative outcomes to
the various proceedings to which the Group is currently subject.

While such alternative options may provide a limited extension of the Group's
liquidity, the effect of implementing these alternative options would be
limited and not sufficient to offset negative effects from adverse changes to
the Group's operating environment, may be detrimental to the Group's
longer-term prospects and highly unlikely to deliver a better outcome for
Shareholders than the Intended Fundraise. The Directors believe that the
Intended Fundraise is currently the only viable solution capable of
implementation in the timeframe required to meet the Group's ongoing
operations and provide sufficient working capital for the Group's short-term
operational requirements while operating at a reduced level for the next 18
months and to continue as a going concern.

If the Intended Fundraise does not proceed for any reason, including if the
Resolutions are not passed by Shareholders at the General Meeting, based on
the Group's current cash reserves, the ongoing costs and current reduced
operational output, and taking into account the proceeds which will be
received from the sale of "Iron Destiny" at completion, which is expected
later this month, the Group only has sufficient net accessible cash until
approximately the end of August 2026, subject to volatility of iron ore
pricing, operating expenses (including energy costs) and in circumstances
where there are no material changes to the operating conditions of the Group
including energy supply, and no restrictive measures are put in place by the
insolvency manager appointed within FPM and there are no negative outcomes to
the various proceedings to which the Group is currently subject. On this
basis, absent successful completion of the Intended Fundraise, the Group's
operating subsidiaries would face a cash shortfall at approximately the end of
August 2026 and, as a result, the Group may be unable to continue as a going
concern at that time. The Directors believe that in such circumstances, absent
the recovery of VAT refunds (which is outside the control of the Company), it
is highly likely that the Company would have no option but to file for
insolvency in the relevant jurisdictions and Shareholders may lose all or a
substantial portion of their investment.

 

1.2    The Group is subject to various legal, fiscal, and political actions
and is at risk of future actions due to its association with Mr Zhevago

Mr Zhevago is a discretionary beneficiary of The Minco Trust, which wholly
owns Fevamotinico, the Company's largest shareholder. Fevamotinico holds 49.32
percent of the existing Ordinary Shares in issue (excluding Ordinary Shares
held in treasury). Mr Zhevago was the founder of the Group in its current form
and served as Chief Executive Officer of the Company from November 2008 to
October 2019. He remained on the Board as a Non-executive Director until
December 2022, when he stepped down following his detention in France. Mr
Zhevago does not currently perform any role on behalf of the Group and is no
longer a director, employee, officer or consultant to any member of the Group.
However, given his historic connections with the Group and his position as one
of the beneficiaries of The Minco Trust, he is often publicly associated with
the Group by third parties, including the media, and has been and may continue
to be determined by certain authorities in Ukraine to be the Company's
ultimate beneficial owner. In addition, Mr Zhevago still retains the right
pursuant to the Relationship Agreement to appoint himself as a director of the
Company, or another person as his representative director, in each case in a
non-executive capacity, and while he has not exercised this right to date,
there can be no assurance, absent an amendment to the Relationship Agreement,
that he will not choose to exercise this right in the future. Mr Zhevago also
has certain information rights relating to the Group under the Relationship
Agreement and the Group interacts with Mr Zhevago in relation to the exercise
of such rights. Mr Ivan Zhevago (Mr Zhevago's son) attends board meetings of
the Company as a non-voting observer by agreement with the Board, but does not
attend any parts of those meetings in relation to any actual or potential
conflict of interest matters, and is not allowed to attend meetings of any
board committees of the Company. It is not expected that the Intended
Fundraise would result in Fevamotinico's shareholding falling below this
threshold and therefore the Relationship Agreement will likely remain in
place.

Mr Zhevago is subject to a number of allegations and legal proceedings in
Ukraine and other jurisdictions, including allegations of embezzlement and
misappropriation of funds from a Ukrainian bank, Bank F&C, which was owned
by Mr Zhevago and was declared insolvent by the National Bank of Ukraine in
2015. Subsequent to this insolvency, Mr Zhevago was accused of involvement in
criminal activity (including bribery). In addition, in February 2025 the
Ukrainian government imposed personal sanctions against Mr Zhevago and his
assets. See further paragraph 1.2 (Corporate, sanctions and cross-border
regulatory matters) in Appendix B to this announcement.

These allegations and the imposition of sanctions, together with the
association between Mr Zhevago and the Group, have contributed to various
legal and enforcement actions involving the Group's Ukrainian subsidiaries,
including the Ukrainian tax authorities suspending payment of VAT refunds,
notwithstanding that such entities are not owned by Mr Zhevago. See further
paragraph 1.3 (The suspension of VAT refunds in Ukraine has materially
constrained the Group's liquidity) of this Appendix A. In addition, at the
request of the Ukrainian authorities, Swiss authorities have imposed a
restriction on Ferrexpo AG which prevents it from issuing new shares or
transferring any of its existing shares. To date, the Company has been
unsuccessful in Ukrainian court proceedings in seeking to overturn decisions
of Ukrainian authorities implementing restrictions on the Group's
subsidiaries, and there is no guarantee as to when such restrictions would be
lifted, or at all. See further paragraph 1.2.2 (Enforcement proceedings
relating to restrictions on certain corporate rights in principal Ukrainian
operating subsidiaries in connection with claim against Mr Zhevago relating to
Bank F&C personal surety) in Appendix B to this announcement.

The sanctions, legal proceedings and allegations against Mr Zhevago have had
and continue to have a material adverse effect on the Group's business,
financial condition, results of operations and prospects. The personal
sanctions imposed on Mr Zhevago by the Ukrainian authorities, together with
other legal actions relating to Mr Zhevago, have had and continue to have a
material adverse impact on the Group's ability to access financing and banking
arrangements. In particular, lenders, financial institutions and other
counterparties have been and may continue to be unwilling or unable to provide
funding or banking facilities to the Group due to concerns regarding Ukrainian
sanctions compliance, anti-money laundering requirements and "Know Your
Customer" (KYC) obligations. At present, the Group is operating with very
limited banking arrangements outside of Ukraine and existing banking partners
may cease to provide banking services to the Group which could further
restrict (or prevent) the ability of the Group to make payments outside of
Ukraine. This severely limits the Group's access to debt financing and
restricts the range of financing options available to it and has also resulted
in the Group having access to very limited banking arrangements (including
with MBaer Merchant Bank following the revocation of its banking licence) and
restrictions on making payments outside of Ukraine.

In addition, there is a risk that authorities in other relevant jurisdictions,
including countries where the Group operates or holds assets (including but
not limited to Austria, Switzerland, the United Arab Emirates and the United
Kingdom), may initiate investigations or proceedings involving the Group or
impose restrictions or sanctions on the Group or any member of the Group,
whether due, directly or indirectly, to the Group's association with Mr
Zhevago or otherwise. Any such actions may result in financial penalties,
asset restrictions, operational disruption or reputational damage, which could
have a material adverse effect on the Group's business, financial condition,
results of operations and prospects.

The Board keeps the Company's shareholder structure under regular review,
including options to mitigate risks associated with the association between
the Group and Mr Zhevago. However, the Board's ability to effect changes to
the ownership structure is constrained by legal, regulatory and practical
considerations outside its control, including that Mr Zhevago holds no
direct shareholding in the Company and is only one of three discretionary
beneficiaries of The Minco Trust.

There can be no assurance that no additional claims, investigations, sanctions
or enforcement actions will not be brought against the Group or its
subsidiaries, relating to matters concerning Mr Zhevago. Any such
developments, whether or not ultimately successful, could result in further
operational disruption, restrictions on the Group's activities, diversion of
management time and resources, reputational harm and increased costs and could
ultimately affect the ability of the Group to continue as a going concern.
More broadly, the continued association between Mr Zhevago and the Group may
adversely affect stakeholder confidence in the Group. Any of the foregoing
factors, individually or collectively, could continue to have a material
adverse effect on the Group's business, financial condition, operational
activities and prospects, and its ability to continue as a going concern.

The Group has taken steps, including the issuance of formal notifications
under international investment agreements in place, namely (1) the United
Kingdom and Ukraine Bilateral Investment Treaty and (2) the Switzerland and
Ukraine Bilateral Investment Treaty (the "UK-Ukraine BIT" and "Swiss-Ukraine
BIT", respectively), and various actions in the Ukrainian courts, to contest
the actions of Ukrainian government agencies which it believes arise from the
association between the Group and Mr Zhevago. While these actions are intended
to protect the Group's rights and assets, they may accelerate and influence
the legal and regulatory actions being taken against the Group, which could
negatively impact the Group's position and activities in Ukraine and could
lead to a further increase in the scrutiny, retaliatory measures and actions
against the Group. There can be no assurance that the Group's responses to
legal proceedings in Ukraine will be successful or that they will not lead to
additional regulatory or enforcement measures, which could have a material
adverse effect on the Group's business, results of operations, financial
condition and prospects.

 

1.3    The suspension of VAT refunds in Ukraine has materially constrained
the Group's liquidity

The Group relies on the timely receipt of VAT refunds from exported products
from the Ukrainian tax authorities as an important component of its working
capital. The imposition by the Ukrainian government of personal sanctions
against Mr Zhevago, who is one of three discretionary beneficiaries of The
Minco Trust (which in turn wholly owns Fevamotinico, the Company's largest
shareholder), is connected to the Ukrainian tax authorities suspending the
payment of VAT refunds to the Group's Ukrainian subsidiaries since March 2025
on the basis that the Ukrainian authorities consider Mr Zhevago to be the
ultimate beneficial owner of the Group.

As a result of this suspension of VAT refunds, as at 31 March 2026, the
Group's net VAT receivable balance in Ukraine was US$90.3 million. Of this
amount, as at the date of this announcement, US$78.9 million had been claimed
for refund from the Ukrainian tax authorities for the period from January 2025
to March 2026, and US$69.4 million of the refunds (representing the period
from January to December 2025) were refused by the tax authorities in Ukraine
because of the association of the Group with Mr Zhevago as a consequence of
personal sanctions imposed on him by the Ukrainian authorities. This has had a
significant impact on the Company's net cash position, which had reduced to
approximately US$20 million as at 17 April 2026, and when excluding the
Group's funds held at MBaer Merchant Bank, which in February 2026 had its
banking licence revoked, the Group's net accessible cash was approximately
US$17 million as at 17 April 2026.

Without the Intended Fundraise and absent any other mitigating actions, the
Group only has sufficient net accessible cash until approximately the end of
August 2026, subject to volatility of iron ore pricing, operating expenses
(including energy costs) and in circumstances where there are no material
changes to the operating conditions of the Group, including energy supply, and
no restrictive measures are put in place by the insolvency manager appointed
within FPM and there are no negative outcomes to the various proceedings to
which the Group is currently subject. See further paragraph 1.1 (The Group is
expected to only have sufficient net accessible cash until approximately the
end of August 2026 and, with the continuation of withholding of VAT refunds to
the Group, the absence of completing the Intended Fundraise could give rise to
material negative consequences for the Group and it is possible that
Shareholders could lose the entire value of their investment in the existing
Ordinary Shares) of this Appendix A. If the suspension of VAT refunds
persists, the amount of unrecovered VAT will continue to increase, further
exacerbating the Group's liquidity pressures.

The Group has taken significant actions to manage the significant cash
shortfall as a result of this suspension of VAT refunds, including materially
reducing the scale of its business to only a quarter of its full production
capacity (currently operating only one of four pellet lines), placing a
portion of its workforce in Ukraine on furlough or reduced hours, deferring
investment and maintenance programmes, significantly reducing procurement of
goods and services, and the continued suspension of all non-essential capital
expenditure, overheads and corporate social responsibility and humanitarian
spending. These measures have, in turn, resulted in an increase in the
absorption of fixed costs as a portion of unit costs, limited the Group's
ability to meet normal customer demand, and significantly reduced the Group's
operational output and revenue.

The Group has initiated legal proceedings in the Ukrainian courts to seek the
recovery of the outstanding VAT refunds that it is owed. Given the nature of
the VAT refund process in Ukraine, the Group is required to lodge separate
legal proceedings in Ukraine for each subsidiary entity in respect of each
month for which a VAT refund is withheld. As a result, at the date of this
announcement, the Group currently has 19 active legal claims in Ukrainian
courts relating to VAT refunds for a total of approximately US$69 million for
the period from January 2025 to December 2025 (inclusive).

While certain claims of the Group's subsidiaries have been successful
(including at the level of the Supreme Court of Ukraine), the Ukrainian tax
authorities have not refunded any VAT amounts to the Group. In addition, the
Group has received formal communication from the Ukrainian tax authorities
indicating that VAT refunds are currently unavailable due to the personal
sanctions imposed on Mr Zhevago and his assets. Although these decisions do
not affect the underlying legal merits of the Group's claims (which have been
successful in Ukrainian courts), they create uncertainty as to the
enforceability of the Group's claims and the effectiveness of available legal
remedies, in particular given the State Treasury Service of Ukraine have not
performed so far the payment of VAT refund in accordance with the decision of
the Supreme Court of Ukraine dated 11 February 2026. Delays in enforcement or
continued administrative restrictions could result in a prolonged period
during which the Group is unable to access VAT refunds, and there is a risk
that the Group will continue to be unable to recover such VAT refunds.

The continued suspension of VAT refunds may further weaken the Group's
liquidity position and its ability to fund operations and meet its financial
obligations as they fall due which could have a material adverse effect on the
Group's business, financial condition, results of operations and prospects,
and its ability to continue as a going concern. While the Group intends to use
proceeds from the Intended Fundraise to support its liquidity, there can be no
assurance that such proceeds will be sufficient to offset the impact of
ongoing suspension of VAT refunds. If the situation persists or deteriorates,
the Group may be required to seek additional financing, which could be
dilutive to Shareholders and may not be available on acceptable terms, or at
all.

 

1.4    The Group's principal operating subsidiary is in bankruptcy
proceedings in Ukraine and the Group may lose control of it which could have a
material adverse impact on the Group

On 24 February 2026, the Company announced that a local court in Ukraine
opened bankruptcy proceedings against FPM, the Group's principal operating
subsidiary which owns the Poltava mine and the Group's iron ore processing and
pelletising facilities in Ukraine. The decision followed the Commercial Court
of Poltava Region having accepted for consideration an application from Maxi
Capital to open bankruptcy proceedings on 14 May 2025. This relates to an
ongoing legal action in Ukraine between Maxi Capital and FPM relating to
contested surety agreements and a claim in the amount of UAH4,727 million
(approximately US$111.5 million) (for further details of the contested surety
claim, see paragraph 1.2.3 (Contested sureties claim) in Appendix B to this
announcement). These bankruptcy proceedings against FPM by a local Ukrainian
court and the consequent appointment of an insolvency manager have occurred
notwithstanding that the underlying contested sureties claim remains under
review by the Supreme Court of Ukraine and the Supreme Court has suspended
enforcement action against FPM pending the Supreme Court's decision. FPM has
appealed against the bankruptcy proceedings. On 9 April 2026, FPM's appeal
against the opening of bankruptcy proceedings was adjourned and the next
hearing is scheduled to take place on 30 April 2026.

Following the opening of bankruptcy proceedings against FPM on 24 February
2026, an insolvency manager has been appointed and a moratorium on the
satisfaction of creditors' claims has been imposed. The insolvency manager has
started to compile a list of creditor claims in accordance with Ukrainian
regulations. Although the existing FPM management team currently remains in
place and continues to operate the business, there are: (i) certain actions
which the FPM management team's governing bodies cannot take without the
consent of the insolvency manager (such as the receipt or granting of loans
and the leasing of property); (ii) certain further actions which FPM's
governing bodies are not authorised to take without the consent of the
creditors' committee or the creditors' meeting, if the committee is not yet
formed (such as entering into significant transactions where the market value
amounts to 10 percent or more of the value of FPM's assets or disposal of
FPM's material assets); and (iii) certain further actions which are FPM's
governing bodies are not authorised to take at all during the property
administration stage of the insolvency process (including the granting of
loans, providing sureties or guarantees, disposal or granting of new
encumbrances over real property and the payment of dividends). There also
remains a risk that the court may, on its own initiative or upon motion of the
parties, seek to terminate the powers of FPM's executive body and transfer the
executive body's functions to the insolvency manager, which would result in
the Company's loss of control of FPM. Loss of control of FPM would result in
the Group being unable to manage its operations, receive cashflows from
operations or prevent the distribution of assets to creditors of FPM.

FPM is the supplier of pellets and concentrate under intercompany export
arrangements with Ferrexpo AG. Restrictions on the payment of dividends by
Ukrainian companies to non-Ukrainian companies imposed following the outbreak
of the war means that the Group has been unable to arrange for FPM to pay
dividends to enable Ferrexpo AG to discharge payables under the pellets and
concentrate export arrangements. As at 31 December 2025, the outstanding
balance of the intercompany receivables owed to FPM was US$673 million. There
is a risk in bankruptcy proceedings of FPM that, if the powers of FPM's
executive body were transferred to the insolvency manager, claims for
repayment of such receivables may be brought by FPM against Ferrexpo AG.

The initial stage of bankruptcy proceedings is the stage of the debtor's
property management. The court introduces this stage for up to 170 calendar
days, but the court can further extend it. The property management procedure
is intended to ensure supervision over the management and disposal of FPM's
assets, with a view to their preservation and efficient use, to facilitate the
assessment of FPM's financial position, and to determine the appropriate
subsequent stage of the bankruptcy proceedings (which is either rehabilitation
or liquidation). Within the property management procedure framework, the
insolvency manager is not selling the debtor's property to satisfy creditors'
claims. Such an obligation arises for the insolvency manager at the next
stages of bankruptcy proceedings - rehabilitation or liquidation - and this
subsequent stage will be introduced by a court order at the final meeting of
the property management procedure.

Should the bankruptcy proceedings progress and FPM's appeal be unsuccessful or
not heard in a timely manner, or if further adverse rulings are made
notwithstanding FPM's ongoing appeals, this could result in FPM entering into
the rehabilitation or liquidation stage resulting in a material adverse
negative effect on the Group's business, financial condition, results of
operations and prospects. In particular, such risks may affect the Group's
ability to continue as a going concern and its long-term viability. Should the
bankruptcy proceedings and treatment of FPM result in the Company breaching
the UK Listing Rules or the Disclosure Guidance and Transparency Rules of the
FCA, (for example because it no longer has control of its main operating
subsidiary) the Company could face penalties from the FCA ranging from fines
or public censure to a suspension or cancellation of the Company's listing.

 

1.5    There is a significant risk of the management of certain corporate
rights in the Group's Ukrainian subsidiaries being transferred to the Asset
Recovery and Management Agency of Ukraine, and also the nationalisation of the
Group's assets in Ukraine

On 4 March 2025, the State Bureau of Investigation ("SBI") in Ukraine released
a statement noting that the Pecherskyi District Court of Kyiv granted a
request of the Prosecutor General's Office of Ukraine to transfer 49.5 percent
of the corporate rights of FPM to the Asset Recovery and Management Agency
("ARMA") of Ukraine. The statement also made reference to the transfer to ARMA
of corporate rights in a further 15 undisclosed legal entities, and it was
subsequently discovered that this included corporate rights in a number of
other Ukrainian subsidiaries of the Group.

The SBI statement on 4 March 2025 stated that the transfer of the corporate
rights of FPM (and the other entities) is in connection with the ongoing
criminal case in Ukraine relating to the alleged embezzlement by Mr Zhevago of
funds from Bank F&C, a Ukrainian bank previously owned by Mr Zhevago which
was declared insolvent in 2015. Bank F&C has never been part of the Group.

In April and October 2025, ARMA announced steps towards the selection of a
temporary asset manager. However, as at the date of this announcement, only
preliminary steps have been taken and no formal selection tender has been
launched. ARMA is under no obligation to initiate such process following the
noted preliminary steps, nor is it subject to any statutory deadline. The
transfer of corporate rights to ARMA does not constitute nationalisation,
these being distinct legal regimes. Should a temporary asset manager be
appointed, it would act on a temporary basis pursuant to the relevant court
order without displacing the Group's ownership of the corporate rights in the
relevant Ukrainian subsidiaries. The temporary asset manager would generally
be required to coordinate the exercise of shareholder powers with the relevant
Group entity which is the owner of the corporate rights.

As at the date of this announcement, no Group company has received any
official documentation or requests from the Ukrainian authorities with regard
to the decision of the Pecherskyi District Court of Kyiv to transfer corporate
rights to ARMA, and management has not seen a copy of the court decision.

The SBI statement relating to a transfer to ARMA followed a separate press
release made by the SBI on 20 February 2025 which stated that it was preparing
to lodge a claim together with Ukraine's Ministry of Justice to the High
Anti-Corruption Court of Ukraine (the "HAAC"), to nationalise (confiscate)
49.5 percent of shares in FPM and certain of its assets. The HAAC does not
adjudicate nationalisation matters; its jurisdiction is rather confined to
asset-recovery sanctions, which constitute a distinct legal regime. If a claim
is upheld by the HAAC, the relevant assets (which may include shares) would be
recovered to the benefit of the state (i.e. resulting in a transfer of
ownership to the state). By contrast, a transfer of assets to ARMA does not
affect ownership, but merely enables the appointment of a temporary manager to
administer the assets for the duration of the relevant arrest imposed within
the relevant criminal proceedings. See further paragraph 1.2.1 (Restrictions
on certain corporate rights in all of the Group's Ukrainian subsidiaries in
connection with the Bank F&C investigation) in Appendix B to this
announcement.

It is the Group's understanding that no claim has been lodged to the HAAC
relating to a nationalisation (confiscation) of certain assets and corporate
rights of FPM. The details of, and next steps in relation to, these actions
therefore remain unclear.

In the event that FPM or any of the Group's assets are subject to
nationalisation or other challenges of ownership, and the Group is unable to
defeat such a claim, there is a risk of the Group losing its ownership
interest in such a company or its assets, which could have a material adverse
effect on the Group's business, financial condition, results of operations and
prospects and ability to continue as a going concern.

 

1.6    The Group faces severe operational and financial risks arising from
the war in Ukraine

The Group's operations are located in Ukraine, which has been subject to a
full-scale military invasion since February 2022. The duration, intensity and
scope of the war remain uncertain, having caused widespread damage to
Ukrainian society and national infrastructure, including energy generation and
transmission assets, transport networks and civil and industrial facilities.
The evolving nature of the war makes it inherently difficult to foresee the
ultimate impact on the Group's operations and activities and resulting
financial condition.

The war has had and continues to have a significant and adverse impact on the
Group's operational performance. In particular, the price of energy and key
consumables for production, including electricity and gas, has materially
increased. In addition, the Group has experienced disruption to logistics and
export routes, including constraints affecting the transportation of its
products to international markets (in particular transport routes through
Ukrainian Black Sea and Danube ports). The Group has also faced workforce
challenges, including mobilisation of parts of the workforce into military
service and people leaving Ukraine, which has challenged the composition and
availability of its workforce and skills.

Attacks on Ukrainian energy infrastructure have resulted in significant and
recurring interruptions to the supply and price of electricity, especially
during the winter months. These shortages have materially disrupted the
Group's production processes and have, at times, required the Group to import
electricity from EU countries at significantly higher prices. Furthermore,
damage to Ukrainian energy infrastructure has affected the Group's ability to
secure such imports on a sustainable basis.

As a result of interruptions to the stable supply of electricity following
sustained attacks on Ukrainian electricity generation and transmission
infrastructure, it was necessary to suspend production during November to
December 2025, and again between January and February 2026. Whilst the Group
has been able to restart operations on a limited basis in February 2026,
following improvements in the availability and price of domestic and imported
electricity supply, there can be no assurance that a stable and economically
viable supply of electricity will continue.

There is a continued risk of further disruption. The Group cannot guarantee
that electricity supply will not be subject to additional interruptions or
that infrastructure damage will not worsen. The Group cannot provide assurance
that the war will not escalate or expand geographically in a manner that
directly affects the Group's assets, key suppliers, logistics routes or export
infrastructure. The Group is not able to insure its assets in Ukraine, and
seaborne freight shipments may be subject to higher insurance premiums. Any
such developments could result in further partial or complete suspension of
operations, partial or total destruction or loss of assets, increased costs,
and delays in increasing levels of production beyond a single pellet line.

There is no certainty as to the timing or outcome of any potential political
resolution to the war, and there can be no assurance that a ceasefire or peace
agreement will be reached in the near term, or at all. Accordingly, the Group
may be required to continue operating in a prolonged period of sustained
military conflict and associated structural disruption, without any
improvement in operating conditions. Any such prolonged environment could
result in extended periods of reduced production, elevated costs and continued
constraints on logistics, energy supply and workforce availability, and
continued risk of damage to the Group's assets or loss of control over some or
all of the Group's assets.

The continuation or escalation of the war may have a material adverse effect
on the Group's business, financial condition, results of operations and
prospects and could affect the Group's ability to continue as a going concern.
Prolonged disruption could impair the Group's ability to generate revenues,
meet its financial obligations and execute its strategic objectives. This
could result in the need to further impair asset values and may adversely
affect investor confidence in the Company.

 

1.7    Legal proceedings and judicial risk in Ukraine may result in
material adverse outcomes, restrictions and enforcement actions for the Group
and could threaten the future viability of the Group

The Group operates in Ukraine and is subject to the Ukrainian legal, judicial
and regulatory framework. The Group is currently involved in a number of legal
and administrative proceedings in Ukraine, the details of which are set out in
Appendix B to this announcement. These include claims which have resulted, at
different points in time, in the freezing of some of the shares in the Group's
Ukrainian subsidiaries, the freezing of access to FPM's owned railway wagon
fleet and infrastructure, the freezing of FPM bank accounts and the detention
of senior management resulting in the need to pay significant bail payments
for their release.

Ongoing legal actions include a claim by Maxi Capital in relation to contested
surety agreements in the amount of approximately US$111.5 million, which is
currently awaiting a deliberation and a decision from the Supreme Court of
Ukraine and has, despite the ongoing review by the Supreme Court and a ruling
from the Supreme Court of Ukraine to suspend enforcement of the claim,
resulted in the opening of bankruptcy proceedings against FPM by a court of
first instance at the request of Maxi Capital. See further paragraph 1.2 (The
Group is subject to various legal, fiscal, and political actions and is at
risk of future actions due to its association with Mr Zhevago) and paragraph
1.4 (The Group's principal operating subsidiary is in bankruptcy proceedings
in Ukraine and the Group may lose control of it which could have a material
adverse impact on the Group) of this Appendix A.

FPM and its Head of the Management Board are also subject to a civil claim
following an investigation by the National Police of Ukraine seeking joint
liability in the amount of UAH157 billion (approximately US$3.7 billion) in
favour of the Ukrainian state. The claim alleges illegal sale of waste
products and, more recently, illegal mining and sale of subsoil, resulting in
environmental damage. See further paragraph 1.1.2 (Investigations by the SBI
in Ukraine and the National Police of Ukraine regarding the use of waste
product by FPM and alleged illegal extraction of minerals) in Appendix B to
this announcement. Certain of the Group's Ukrainian subsidiaries are also
subject to various tax audits and investigations in Ukraine, the aggregate
value of which is approximately UAH7.4 billion (equivalent to approximately
US$174.6 million). See further paragraph 1.4 (Tax and transfer pricing
matters) in Appendix B to this announcement.

The Ukrainian legal and fiscal environment is evolving and, in certain
respects, remains uncertain, with a degree of inconsistency in the
interpretation and application of the rule of law, legislation and
regulations. In addition, while reforms have been undertaken in recent years,
concerns have been raised by international bodies, including the European
Commission, regarding corruption and the independence of the judiciary in
Ukraine. As a result, there remains a risk that judicial and regulatory
decisions may be influenced by political and economic considerations, which
may be exacerbated by the war or current circumstances facing Mr Zhevago, and
there can be no assurance that either the Group's positions will be upheld in
ongoing or future proceedings, or that the Group will be able to obtain
effective legal remedies in a timely manner, if at all. The outcome of ongoing
proceedings is inherently uncertain, particularly in a political and legal
environment where there may be limited predictability in judicial
decision-making.

The Group is and may continue to be subject to adverse judgments, penalties,
fines or enforcement actions as a result of these ongoing legal proceedings.
In addition, Ukrainian authorities may take further actions that affect the
Group's assets or operations, or its personnel, including the imposition of
restrictions, the initiation of enforcement proceedings against the Group's
subsidiaries or personnel, or the commencement of insolvency-related actions.
Such actions could disrupt the Group's business activities, divert significant
amounts of management's time and result in significant costs and unfavourable
outcomes.

The potential financial exposure arising from ongoing and future proceedings
is, and could continue to be, material. Any requirement to make payments,
satisfy claims or comply with adverse rulings could result in a significant
outflow of cash and may adversely affect the Group's liquidity, financial
condition, results of operations and prospects. In particular, such risks may
impact the Group's ability to continue as a going concern and may affect its
long-term viability.

 

1.8    A significant portion of the Group's assets, including FPM's mining
licence and certain corporate rights of Group subsidiaries, are subject to
arrest (freezing) orders to preserve the assets in connection with ongoing
criminal and civil claims in Ukraine, some of which have progressed to the
enforcement stage, and which could result in the Group losing control of
material assets

In connection with criminal and civil legal proceedings in Ukraine, some (but
not all) of which relate to claims against Mr Zhevago involving Bank F&C,
Ukrainian courts have ordered the arrest (freeze) of certain assets belonging
to the Group. This includes arrests over certain corporate rights in the
Group's subsidiaries, arrest of bank accounts, arrest over the FPM mining
licence and arrests over other assets of FPM (including rail wagons and
railway access track). The arrest (freeze) orders prevent the disposal of
assets and in certain cases preclude the use of the asset (including the
voting of certain shares in the Group's Ukrainian subsidiaries and the right
to receive dividends on such shares). For further details of these arrests,
see further paragraph 1.2.2 (Enforcement proceedings relating to restrictions
on certain corporate rights in principal Ukrainian operating subsidiaries in
connection with claim against Mr Zhevago relating to Bank F&C personal
surety) in Appendix B to this announcement.

These arrests have been imposed as a preventative measure to preserve assets
in connection with the underlying legal claims, in order to allow for a future
potential confiscation and sale of the assets in connection with such claim.
Some of these arrests (relating to 50.3 percent of the shares in FYM and FBM
and 49.3 percent of shares in FPM) have moved to the enforcement stage and a
State Bailiff has been appointed which could lead to a potential sale of these
shares. For further details, see paragraph 1.2.1 (Restrictions on certain
corporate rights in all of the Group's Ukrainian subsidiaries in connection
with the Bank F&C investigation) in Appendix B to this announcement.

Certain of the arrest orders relating to the arrest (freeze) of rail wagons
and railway access tracks have in the past had an adverse impact on the
operations of the Group. Whilst this particular prohibition to use rail wagons
and railway access tracks has since been cancelled, there can be no certainty
that the same or similar types of prohibition or arrest will not be imposed in
the future. Certain of the arrests also currently prohibit the use of arrested
corporate rights, including the payment of dividends by the Group's Ukrainian
subsidiaries to its parent undertaking, which impacts the ability to
distribute funds from the Group's Ukrainian subsidiaries to Ferrexpo AG (and
ultimately to the Company). Further, if any of the asset (freeze) orders are
enforced, this could lead to a forced sale or transfer of assets of the Group
resulting in a loss of ownership of such assets which could have a material
adverse effect on the Group's financial condition, results of operations and
prospects.

 

1.9    The Group requires significant additional financing to maintain and
upgrade its existing facilities and assets and also to fund future expansion
plans

The net proceeds of the Intended Fundraise are expected only to stabilise the
liquidity position of the Group and meet its short-term operational
requirements while operating at a reduced level for the next 18 months and to
continue as a going concern; as a result, any staged restoration and
stabilisation of production capacity to sustainable levels is conditional on
stabilisation of the Group's operating environment, as well as satisfying
additional capital requirements for longer-term growth. Therefore, the
proceeds of the Intended Fundraise may not be sufficient to enable the Group
to maintain and upgrade its existing facilities and assets, including as a
result of the requirement for the use of proceeds for working capital
requirements and the severe operational and financial constraints under which
the Group currently operates. See further paragraph 1.6 (The Group faces
severe operational and financial risks arising from the war in Ukraine) of
this Appendix A. As a result of operating under such constraints, the Group's
development and maintenance of its assets has been affected and significant
further investment is required to return the Group's operations to pre-war
levels, including the restart of additional pellet lines, and to implement
improvements and to upgrade its current operating assets, including its mines,
processing and beneficiation facilities, and logistics operations. The timing
of any such restart could be accelerated through the raising of additional
external capital (in addition to the net proceeds of the Intended Fundraise).
Furthermore, significant additional financing beyond the net proceeds of the
Intended Fundraise will be required to develop the Group's future operations
and expansion plans, including the Belanovo asset, in the event that there is
a cessation of the war in Ukraine.

Although the net proceeds of the Intended Fundraise would be used primarily to
strengthen the Group's liquidity position and support the continuation of
operations during a period of ongoing operational and financial constraint, a
prolonged continuation or deterioration of operating conditions, including as
a result of new developments, may result in the Group requiring additional
financing earlier than currently anticipated and, in such situations, any
upgrades to existing facilities and assets may not be possible within the
timeframe envisaged or at all.

The financing of any upgrades of the Group's existing facilities would be
subject to operating cash flows, or available additional capital or
borrowings, and operating cash flows may be insufficient to meet actual
capital cost requirements, including as a result of limitations on operating
activities, including as a result of the war in Ukraine; the continuing
suspension of VAT refunds to which the Group is currently subject; legal
proceedings against the Group; the ongoing bankruptcy process against FPM,
prices for its premium-grade iron ore products being lower than expected; a
delay or increased cost of expansion; increased costs of operations or
increased capital expenditures.

Any capital expenditure programme would be subject to a variety of potential
uncertainties, including changes in economic conditions, fluctuations in the
Ukrainian macro-economic or global iron ore commodity and shipping markets,
regulatory developments, the unavailability of external financing sources, the
pursuit of new business opportunities and defects in design or construction.

The continuation or advance of the military invasion of Ukraine, or the
resumption or the risk of resumption following any cessation of the current
hostilities, or the actions of the Ukrainian government, may influence the
implementation of any future capital expenditure programme. Accordingly, even
subject to satisfying future additional capital requirements, the Group may
not be able to maintain or complete the expansion, modernisation or
improvement to its facilities as planned or on schedule, and the expected
benefits of any capital expenditure programme may not be realised.

Any failure of the Group to invest in its business and develop its assets, or
to successfully implement its business plan, including future expansion plans,
may have a material adverse effect on the Group's business, financial
condition, results of operations and prospects.

 

1.10  The Ukrainian currency is subject to volatility which may adversely
impact the Group

The functional currency of the Group's Ukrainian subsidiaries is the hryvnia.
The functional financial currency of the Company and certain other
non-Ukrainian Group subsidiaries is the US dollar. On consolidation, income
statements and cash flows of the Group's subsidiaries for which the US dollar
is not the functional currency are translated into US dollars at the average
exchange rates during the relevant accounting period. The exchange rate
between the hryvnia and the US dollar has historically seen periods of
volatility, and the translation effect during such periods could have a
material adverse effect on both the individual and consolidated results of the
Group's operations. Due to the absence in Ukraine of a legislative basis for
creating hedging instruments, the prevailing market practice in Ukraine, to
which the Group adheres, is not to hedge against currency fluctuations. The
hryvnia has devalued in recent years relative to the US dollar and further
devaluation could have an impact on future cash flow generation.

Any adverse or volatile movement in the exchange rate between the hryvnia and
the US dollar may have a material adverse effect on the Group's reported
results of operations and financial performance.

 

1.11  A negative or deteriorating relationship with Ukrainian authorities may
materially adversely affect the Group's operations, liquidity and prospects

The Group's Ukrainian subsidiaries are subject to a range of legal,
regulatory, fiscal and administrative processes in Ukraine. The Group is
currently facing, among other things, the suspension of VAT refunds, ongoing
legal and enforcement actions, restrictions on banking arrangements and the
opening of bankruptcy proceedings against FPM, its principal operating
subsidiary. The Group believes that certain actions taken by Ukrainian
authorities may be influenced by the association between the Group and Mr
Zhevago. The Group has taken various actions in the Ukrainian courts to defend
its position. Regardless of the merits, such actions, including in the context
of a strained or deteriorating relationship with government agencies, increase
the risk of adverse decisions, delayed or denied approvals, regulatory
interventions, restrictions on asset usage, the risk of non-renewal or
revocation of exploration and mining licences, enforcement measures or other
actions which could impair operations. Any continuation or escalation in such
activities by government agencies could materially affect the Group's
liquidity, access to VAT refunds, ability to obtain or renew permits and
licences, ability to execute development plans and its ability to operate as a
going concern. If any such risks materialise, they could have a materially
adverse effect on the Group's business, results of operations, financial
conditions and prospects.

 

1.12  The Group's financial performance is dependent on the global price of
and demand for iron ore and demand for steel and steel products

The iron ore industry is characterised by intense global competition. As a
producer which exports its products, the Group competes with a number of
larger global mining companies, including international companies which have
total assets and financial resources substantially greater than those of the
Group. Although, at present, the Directors believe that the Group benefits
from the close geographical proximity to traditional customers, some
competitors may, in the future, enter into commercial agreements with the
Group's customers, which may result in a loss of market share.

A reduction in demand from geographically proximate steel plants for the
Group's premium iron ore pellets and concentrate products may result in
reduced demand or lower margin sales. In addition, some competitors benefit
from higher economies of scale and lower cash costs of production, and
therefore, there is a risk that in down cycles, when realised sales prices are
lower, the Group may not be as profitable to compete in certain export
markets.

Competition from global iron ore pellet and concentrate producers or reduction
in demand from geographically proximate steel plants could have a material
adverse effect on the Group's business, results of operations, financial
condition and prospects.

 

1.13  The Group's business is subject to a number of risks (including mining
risks) and hazards, including the significant risk of disruption or damage to
persons and property

The Group's operations are subject to significant risks and hazards inherent
in the mining and metallurgical industry. A combination of health and safety
protocols and training, asset maintenance and risk management based on
evaluation, experience and knowledge, cannot eliminate such operational risks.
Even though the Group aims to instil a culture of health and safety, its
mining, processing and beneficiation activities may be affected by unforeseen
health and safety incidents, including equipment failure, war damage, unusual
or unexpected geological conditions, labour disputes and changes in the
regulatory environment. The Group's production activities may be hampered by
accidents associated with the operating of the heavy-duty equipment and
machinery, which could result in human injury or fatality, and prolonged
short-term downtime or longer-term shutdowns of production facilities. These
hazards could result in material damage to human health (including loss of
life), environmental damage, delays to production, monetary losses and
possible legal liabilities.

The occurrence of these hazards and the associated risk of any prolonged
short-term downtime or longer-term shutdown at any of the Group's subsidiaries
could materially and adversely affect the Group's ability to produce,
transport and export its premium grade iron ore products, thereby limiting the
Group's ability to satisfy contractual supply obligations.

Failure to overcome any unexpected problems at a commercially reasonable cost
could have a material and negative adverse effect on the Group's business,
results of operations, financial condition and prospects.

 

1.14  The processing of iron ore into iron ore pellets and concentrate is
costly and subject to fluctuations and increases in input costs, which could
negatively impact revenues, profitability and cash flow generation

Compared to iron ore lump, producing iron ore pellets and concentrate incurs
greater production and beneficiation costs. These include the costs associated
with the consumption of raw materials, energy and fuel, consumables, workforce
and overhead costs. Market forces outside of the Group's control may result in
increases in the costs, such as energy, key consumables and logistics that
affect the Group's activities. Increases in production costs could affect the
Group's profitability, reduce the feasibility and increase the cost of
producing its products in the short-term and its growth plans in the longer
term.

The Group's cost base has been affected by the severe operational constraints
arising from the war in Ukraine, including the limited availability of
domestic electricity, the need to import electricity at materially higher
tariffs, inflationary pressures on consumables and changes in logistics
routes. These factors have materially increased the Group's operating and
production costs and may continue to do so. In particular, the Group's C1 cash
cost of production is vulnerable to changes in the price of electricity, gas,
diesel, key consumables, spare parts, imported materials and contracted
services. The Group's C1 cash cost of production increased from approximately
US$56 per tonne in 2021 to approximately US$76 per tonne in 2025 (2024:
approximately US$78 per tonne), driven principally by energy costs and lower
production volumes, which typically represent approximately 50 percent of
production costs, and the Group may not be able to either diversify or
substitute its energy sources. The Group may not be able to reduce operating
and production costs sufficiently to be competitive. Any increase in the
Group's operating and production costs could have a material adverse effect on
the Group's business, results of operations, financial condition and
prospects.

 

1.15  The Group faces the risk of losing key customers, suppliers,
contractors or employees as a result of the ongoing operational, legal and
geopolitical challenges facing the business

The unstable operating environment in Ukraine, together with disruptions to
logistics and operations, the risk of further suspension of or disruption to
operations, the withholding of VAT refunds, the bankruptcy proceedings
involving FPM, sanction‑related impacts arising from the personal sanctions
imposed on Mr Zhevago and his assets (including the risk of sanctions being
imposed on Group entities due to the Group's association with Mr Zhevago or
otherwise), risks arising from the Group's association with Mr Zhevago,
various legal proceedings against members of the Group unrelated to the
Group's association with Mr Zhevago, may undermine market confidence in the
Group and its ability to operate reliably.

As a result, there are risks that major customers could reduce or cease
purchases from the Group, seek alternative suppliers, or negatively
renegotiate commercial terms. Similarly, suppliers and service providers may
be unwilling or unable to continue providing goods or services on acceptable
terms or at all, particularly where they perceive an increase in counterparty
risk, disruption risk or sanctions or other regulatory compliance
implications. Loss of, or delays in securing, critical supplies may disrupt
production or have other negative consequences for the Group.

The Group also faces significant challenges in retaining and replacing skilled
personnel, including as a result of mobilisation into military service, labour
disruption during operational suspensions, limited cash resources affecting
remuneration flexibility, and reputational impacts arising from actions by the
Ukrainian government and its agencies that affect, directly or indirectly,
perceptions of the Group. Loss of key employees and skills, technical
specialists and contractors, and failure to replace members of the workforce
or train replacements, could impede the immediate and future operational
recovery of the Group and impair long‑term recovery and development plans.

The Group is subject to numerous cyberattacks which may compromise the
availability and confidentiality of infrastructure, the risk of which has been
heightened by the war, and a successful cyberattack could disrupt production,
compromise sensitive data, including of customers, suppliers, contractors or
employees, and damage the Group's ability to operate. Cost-cutting measures
implemented by the Group and a shortage of skilled IT personnel may exacerbate
these risks.

Any loss of key customers, suppliers, contractors or employees may have a
material adverse effect on the Group's operational stability, revenues,
liquidity position and future prospects.

 

1.16  Dependence on relations with third parties

The Group is dependent on the provision of certain services, including
engineering, construction, process design and planning, from third-party
contractors and consultants in order to carry out its operations and implement
strategic developments. The Group's operations and developments may be
interrupted or adversely affected by the potential failure to supply services
by third party providers, by any adverse change to the terms on which services
are made available by third-party providers, or by the potential failure of
third-party providers to continue to provide services that meet the Group's
requirements.

Should the Group find it necessary to change a provider of such services this
could result in additional costs, interruptions to the continuity of the
supply or services, or other adverse effects on the business. Additionally,
the Group may not be able to find adequate replacement services in a timely
manner, or on commercially acceptable terms, or at all. Any disruption or
deterioration or increase in cost with respect to the third-party arrangements
could have a material adverse effect on the Group's business, results of
operations, financial condition and prospects.

 

1.17  Increases in transportation and logistics costs could materially
adversely affect the Group's business and results of operations

The Group relies substantially on the Ukrainian rail network for the
transportation of both key consumables and finished products, and it is
possible that the rail network may be disrupted, whether by the war or
otherwise, or that railway freight tariffs and the cost of leasing additional
rail wagons may increase. In addition to transportation costs to the Ukrainian
border and Ukrainian Black Sea ports, some sales include the cost of delivery
on ocean going vessels exposing the Group to global dry bulk freight rates,
geopolitical risks such as passage through the Black Sea, Suez Canal and Red
Sea, and therefore insurance risk premium and additional costs such as
demurrage and slower deliveries and delivery penalties.

In addition to rail transport, the Group's iron ore products are delivered by
river barges from Ukraine up the River Danube. Risks which can disrupt iron
ore product dispatches by barge include low water in peak summer and frozen
conditions in winter months, resulting in slower or suspended transportation.

Tariffs at all Ukrainian maritime ports including private berths are regulated
by the Ukrainian authorities. Increase in such tariffs could potentially
reduce the competitiveness of the Group's products for export.

Wartime conditions in Ukraine also continue to pose risks to the availability
and reliability of maritime shipping routes, including potential disruption of
loading and sailing due to the risk of damage to port infrastructure, security
restrictions or other war‑related interruptions (including potential
complete blockades of export routes). See further paragraph 1.6 (The Group
faces severe operational and financial risks arising from the war in Ukraine)
of this Appendix A.

If increases in transportation costs materialise, or other risks to transport
routes materialise, they could have a material adverse effect on the Group's
business, results of operation, financial results and prospects.

 

2.     Risks relating to the Ordinary Shares

2.1    Shareholders who do not participate in the Intended Fundraise will
experience an immediate dilution as a result of the Intended Fundraise

Shareholders who do not participate in the Intended Fundraise will upon
completion of the Intended Fundraise experience dilution in their
proportionate voting interests in the Company as a result of the issue of the
New Ordinary Shares expected to be issued in connection with the Intended
Fundraise.

It is also possible that the Directors may decide to offer additional Ordinary
Shares in the future (subject to obtaining the relevant approvals from
Shareholders), including to fund the restart of additional operational
capacity (increasing production from one pellet line to multiple pellet
lines), other expansion plans, or the modernisation of machinery and
equipment. If Shareholders do not take up an offer of Ordinary Shares or are
not eligible to participate in such an offering, their proportionate ownership
and voting interests in the Company will be further reduced and the percentage
that their Ordinary Shares would represent of the total share capital of the
Company would be reduced accordingly.

 

2.2    The price of the Ordinary Shares may fluctuate

The market price of the Ordinary Shares is subject to fluctuations due to
changes in market factors and events, whether occurring in the United Kingdom,
Ukraine or in any other jurisdictions. Business developments of the Group and
its competitors, regulatory changes affecting the Group's operations or
capital structure, variations in the Group's financial results or changes in
financial outlook for the Group or its industry sector by equity security and
other market analysts may affect the market price of the Ordinary Shares.

Appointments to or resignations from the Board or executive management team
and speculation in the press, media or investment community about the Group's
business, financial position, mergers or acquisitions involving the Group or
major divestments by the Group may affect the share price.

Events unrelated to the Group's operating performance or prospects may have an
impact on the Company's share price. Macro-economic factors such as changes in
interest rates, exchange rates and the rate of inflation, changes in fiscal,
monetary or regulatory policies (including tariffs), geopolitical and economic
circumstances or international hostilities may also negatively affect the
Group's share price. Stock markets have from time-to-time experienced
significant price and volume fluctuations that have affected the market prices
of listed securities and the Company has experienced significant volatility in
its share price.

Any future issuance of Ordinary Shares by the Company or disposals of Ordinary
Shares by Shareholders, or anticipation of any such issuance or disposal,
could also have an adverse effect on the market price of the Ordinary Shares.
These factors could also make it more difficult to raise capital through
equity or equity-linked offerings.

The price at which investors may dispose of their Ordinary Shares may be
influenced by a number of factors, some of which may be related to the Group
and others which are not and investors may realise less than the original
amount invested. Furthermore, the Group's results and prospects may from time
to time be below the expectations of market analysts and investors. Any of
these events could adversely affect the market price of the Ordinary Shares.

 

2.3    Any future payments of dividends under the Company's dividend policy
will depend on the financial condition of the Group

Under English company law, a company may only pay dividends out of
distributable reserves and when it has sufficient cash available. Accordingly,
the Company's ability to pay dividends is dependent on the level of
distributable profits available in its parent company accounts, as well as the
availability of cash within the Group. There can be no assurance that the
Company will generate sufficient distributable reserves or cash resources to
restart and maintain dividend payments in the future.

The Company has not paid a dividend since July 2022. Any future decision to
declare and pay dividends will be at the discretion of the Board and will
depend on a range of factors, including the Group's financial performance,
liquidity position, working capital requirements, capital expenditure plans,
general economic conditions and other factors that the Board considers
relevant at the time. The payment of dividends by the Group's Ukrainian
subsidiaries is currently restricted due to the imposition of martial law in
Ukraine, the recent financial performance of the Ukrainian subsidiaries,
existing freezes of corporate rights in Ukrainian entities and also the
ongoing bankruptcy proceedings relating to FPM. See further paragraphs 1.2.1
(Restrictions on certain corporate rights in all of the Group's Ukrainian
subsidiaries in connection with the Bank F&C investigation) and 1.2.4
(Share freeze in relation to undisclosed criminal investigation) in Appendix B
to this announcement. The Board does not currently expect to reconsider the
payment of dividends by the Company until the Group's working capital position
has materially improved.

As a result, investors may not receive any return on their investment in the
form of dividends for the foreseeable future and will need to rely on any
future capital appreciation of the market price of the Company's shares for
any returns.

APPENDIX B

Additional Information

 

1.     LITIGATION

1.1    Alleged criminal, regulatory and environmental matters

1.1.1       Underpayment of iron ore royalties claims by the State Tax
Service of Ukraine and the Office of the Prosecutor General

Group entities involved: FPM & Ferrexpo Yeristovo Mining ("FYM").

On 8 February 2022, FPM received a tax audit report from the State Tax Service
of Ukraine which alleged the underpayment of iron ore royalty payments during
the period April 2017 to June 2021 in the amount of approximately UAH1,042
million (approximately US$24.6 million), excluding fines and penalties.

The Group objected to the claims made in the tax audit report. On 11 August
2023, FPM received a tax notification decision, which alleged the underpayment
of royalty payments in the amount of UAH1,233 million (approximately US$29.1
million), which is higher than the amount initially stated in the tax audit
report due to imposed fines. FPM challenged this notification decision with
the Ukrainian tax authorities.

On 20 October 2023, the Ukrainian tax authorities decided that the amount in
the notification decision is final and not subject to change. In November
2023, FPM filed a lawsuit to challenge the Ukrainian tax authorities'
decision. On 15 April 2024, the court suspended the proceedings pending the
review of another case concerning the challenge of an individual tax
consultation issued by the tax authority to FPM in another matter which is
connected with royalty proceedings. The tax authority filed an appeal
regarding the suspension of the case. As at the date of this announcement, the
court of appeal has not scheduled a hearing date for this appeal.

On 3 February 2022, FPM and FYM were notified by the Office of the Prosecutor
General of an ongoing criminal investigation regarding alleged underpayments
of iron ore royalties during the years 2018 to 2021. On 16 November 2022,
officials from the Bureau of Economic Security of Ukraine conducted searches
at the premises of FPM and FYM, and further searches were carried out on 1
February 2023.

On 3 February 2023, a notice of suspicion (a document which is delivered to a
suspect in a Ukrainian criminal case) was delivered to a senior manager of
FPM, which claimed underpayment of royalty payments in the amount of
approximately UAH2,000 million (approximately US$47.2 million). This notice of
suspicion was received in connection with the above-mentioned criminal
investigation and is separate to the claim of the tax authority.

Bail of UAH20 million (approximately US$0.5 million) in respect of the senior
manager was approved by the court on 9 February 2023. Although the Group had
no obligation to do so, the bail amount was subsequently paid by the Group.

On 6 February 2023, the court arrested (froze) the bank accounts of FPM.
Following a motion to change the scope of the arrest (freezing) filed by FPM,
the court on 8 February 2023 and on 16 February 2023 added exceptions to the
original arrest (freezing) order to allow FPM to make payments for salaries,
local taxes, social security charges, payments for utilities as well as
payments to state and municipal companies. On 19 April 2023, the court of
appeal did not approve the full list of additional exceptions for payments,
approving only exceptions to make payments for salaries, state taxes, social
security charges, and FPM's appeal to cancel the arrest (freezing) of the bank
accounts was not granted.

On 31 October 2023, a notice of suspicion was delivered to a senior manager of
FPM. On 13 November 2023, a court of first instance approved bail for the
senior manager of FPM in the amount of approximately UAH800 million
(approximately US$18.9 million) which was reduced by the court of appeal to
UAH650 million (approximately US$15.3 million). Although the Group had no
obligation to do so, the Group subsequently made a partial payment of the bail
in respect of the senior manager in the amount of UAH50 million (approximately
US$1.2 million as at date of the payment) and the case was transferred to a
local court.

On 26 November 2024, a local court of first instance cancelled the arrest
(freezing) of FPM's bank accounts at one of its Ukrainian banks.

Separately, the Economic Security Bureau of Ukraine ("ESBU") opened a criminal
investigation (case № 62023000000000963 dated 2 November 2023) alleging that
FPM's Head of the Management Board committed a criminal offence comprising
document forgery (tax reports) and large-scale tax evasion amounting to
approximately UAH1,730 million (approximately US$40.8 million). The
investigation claims that the FPM's Head of the Management Board, in
coordination with the chief accountant of FPM, deliberately undervalued
product prices in controlled transactions between FPM and its related parties,
FAG and Ferrexpo Middle East FZE, in connection with transfer pricing
practices. This allegedly resulted in the understatement of FPM's corporate
income tax liabilities for the 2015-2017 financial years. The main evidence
cited by the investigation includes the results of a tax audit and the
findings of an economic expert examination. FPM was informed of the SBI
criminal proceedings on 30 January 2024, when the investigator submitted an
official request for certain documents. After that, the SBI passed the case to
the ESBU which commenced a pre-trial investigation in this criminal
proceeding.

On 3 June 2025, FPM's Head of the Management Board received a notice of
suspicion from ESBU within the framework of this transfer pricing
investigation. Additionally, FPM's Head of the Management Board received a
copy of the petition for the application of a preventive measure in the form
of bail in the amount of approximately UAH5 million (approximately US$0.1
million). Although the Group had no obligation to do so, the bail amount was
subsequently paid by the Group on 6 June 2025.

On 13 August 2025, the criminal royalty case and the criminal transfer pricing
case described above were merged. On 13 March 2026, the court cancelled the
bail, and on 26 March 2026, bail in the amount of UAH5 million (approximately
US$0.1 million at this date) was returned to FPM. The case remains at the
preliminary stages and the next hearings to take place, which relate to
procedural matters, are scheduled for 22 April 2026 and 29 April 2026. A
hearing on the merits is not expected to take place in the next few hearings.

No associated liabilities are expected to be recognised by the Company in
relation to the royalty claims in the Group's financial results for the year
ended 31 December 2025. However, as with other ongoing legal proceedings,
there is a risk of a negative outcome.

 

1.1.2       Investigations by the SBI in Ukraine and the National Police
of Ukraine regarding the use of waste product by FPM and alleged illegal
extraction of minerals

Group entities involved: FPM.

On 10 January 2023, the SBI conducted several searches in respect of
investigations into alleged illegal extraction of minerals ("rubble"). The
National Police of Ukraine also carried out investigations in respect of the
same matter and searched and collected samples of the rubble on 17 January
2023 at FPM.

The SBI and the National Police of Ukraine allege that from 2015 to 2021, FPM
mined minerals of national importance, consisting of rock that lies above the
iron ore (overburden), which it is alleged would require an additional
extraction license.

FPM's position is that the materials in question are waste products from iron
ore processing, not separate mineral resources and, as such, no additional
extraction license is required. FPM also maintains that it has complied with
applicable mining legislation.

Sales of the rubble were subject to inspection by the State Service for
Geology and Subsoil of Ukraine for many years before the allegations and sales
were suspended by the Group in September 2021 at the State Service's request.

On 29 June 2023, the SBI issued notices of suspicion to three senior
management representatives and one divisional head of FPM for allegedly
selling rubble without a permit. The individuals were detained and released
following payments of bail totalling UAH122 million (approximately US$2.9
million). Although the Group had no obligation to do so, the bail amount was
subsequently paid by the Group. On 22 September 2023, the National Police of
Ukraine searched the private residence of a senior manager of FPM, issued a
further notice of suspicion and detained the individual, who was released upon
payment of bail of UAH400 million (approximately US$9.4 million) after
spending 38 days in detention. Although the Group had no obligation to do so,
the bail amount was subsequently paid by the Group.

In the pre-trial investigation, a court of first instance issued an order to
freeze FPM's rail wagons and railway access tracks. On 9 October 2023, certain
real estate assets and transport vehicles of FPM were also frozen, however,
this does not restrict their operational use. FPM appealed and sought further
clarity from the court on the scope of the restrictions in relation to rail
wagons, and on 30 October 2023, the court of appeal upheld the asset freeze
but did not clarify the scope. On 22 April 2024, a court of first instance
lifted the prohibition on use of rail wagons and access of the railway tracks,
permitting FPM to use all rail wagons and access tracks. Accordingly, the
freeze of FPM's rail wagons and railway access tracks does not restrict their
operational use.

On 5 March 2024, FPM's bank accounts were frozen (with exceptions) except for
essential payments, and FPM's subsequent appeal against this bank account
freeze was rejected. On 29 April 2024, a court restricted the sale of FPM's
mining license, and FPM's subsequent appeal was rejected. The restriction on
the sale of FPM's mining license does not affect mining operations. The freeze
of the bank accounts does not affect mining operations because FPM has opened
other operational bank accounts since the freeze. As at the date of this
announcement, FPM has no intention of selling its mining licence.

First criminal case, initiated by the SBI

On 19 December 2024, the criminal case involving allegations of rubble mining
and sale initiated by the SBI was transferred by the Supreme Court to a local
court in Horishni Plavni. At a preparatory hearing on 5 March 2025, a judge
refused to decrease the bail for FPM's Head of the Management Board (being one
of the individuals issued with a notice of suspicion and detained). In June
2025, a judge considered whether to merge this case with the royalty case and
decided against the merger. See further paragraph 1.1.1 (Underpayment of iron
ore royalties claims by the State Tax Service of Ukraine and the Office of the
Prosecutor General) of this Appendix B. At a court hearing on 8 April 2026,
FPM received information that the State Service of Geology and Subsoil of
Ukraine had filed a civil claim seeking joint liability of FPM, its Head of
the Management Board and other individuals employed by FPM for damages
amounting to UAH79 million (approximately US$1.9 million). The next hearing is
scheduled for 22 April 2026.

Second criminal case, initiated by the National Police of Ukraine

On 15 January 2025, the Office of the Prosecutor General announced that the
National Police of Ukraine had completed the pre-trial investigation in the
second criminal matter involving allegations of rubble mining and sale and the
case was sent to a court of first instance. On 4 February 2025, FPM received
notice of a civil claim seeking joint liability of FPM and its Head of the
Management Board for UAH157 billion (approximately US$3.7 billion) in favour
of the Ukrainian state. The claim alleges illegal sale of waste products and,
more recently, illegal mining and sale of subsoil, resulting in environmental
damage. FPM rejects these allegations on the basis it has complied with the
requirements of its mining license.

During a hearing on 5 March 2025, the arrest (freezing) of FPM bank accounts
at OTP Bank was cancelled. On 16 June 2025, there was a hearing to consider
whether to merge this rubble case with the royalty case and the court decided
against the merger. See further paragraph 1.1.1 (Underpayment of iron ore
royalties claims by the State Tax Service of Ukraine and the Office of the
Prosecutor General) of this Appendix B. The case was transferred to a new
judge to consider from the beginning. The first preparatory hearing took place
on 7 July 2025, and the next hearing, which is expected to deal with
procedural matters, is scheduled for 5 May 2026. Management understands that
proceedings may last several years.

As at the date of this announcement, neither the criminal nor civil claims
constitute a legal obligation under Ukrainian law. Management considers that
no reliable estimate of the potential outflow or merits can be made, and no
provision is expected to be recorded in the Group's financial results for the
year ended 31 December 2025.

 

1.1.3       Claims by the State Ecological Inspection relating to
alleged violations of environmental rules

Group entities involved: FYM.

The State Ecological Inspection carried out an inspection of FYM in September
2021 and, on 1 October 2021, issued an order to remedy a number of alleged
violations of environmental rules. On 19 July 2022, a court of first instance
ruled in favour of FYM. The State Ecological Inspection subsequently filed an
appeal, which was returned by the court of appeal on 20 March 2023 due to
procedural errors. The State Ecological Inspection requested an extension for
filing a further appeal.

The State Ecological Inspection subsequently filed another appeal, which was
again returned by the court of appeal on 20 July 2023 due to procedural
errors.

There were no further developments until 5 October 2023, when the National
Police of Ukraine conducted a review of FYM's land plots, as described in
paragraph 1.1.4 (Criminal investigations by the National Police of Ukraine
relating to alleged environmental violations) below.

There have been no further developments since then and it is not possible at
present to anticipate future developments in this case. Management believes
FYM has strong arguments to defend its position, and, as a consequence, no
associated liabilities are expected to be recognised in relation to these
matters in the Group's financial results for the year ended 31 December 2025.

 

1.1.4       Criminal investigations by the National Police of Ukraine
relating to alleged environmental violations

Group entities involved: FBM & FYM.

This matter relates to the same facts which are the subject of the dispute set
out in "Claims by the State Ecological Inspection relating to alleged
violations of environmental rules" and other alleged ecological violations by
Ferrexpo Belanovo Mining ("FBM"). The National Police of Ukraine conducted a
review of land plots of FYM on 5 October 2023. On 5 November 2024, a court
authorised a review of FYM's land plots and such review was carried out by the
National Police of Ukraine on 14 November 2024.

As at the date of this announcement, neither FBM nor FYM have any additional
information on the scope of the investigation or the anticipated next steps.

 

1.1.5       Criminal investigations by the National Police of Ukraine
relating to alleged water pollution

Group entities involved: FYM.

This investigation was registered on 26 August 2024. On 27 August 2024, FYM
received a request from the National Police of Ukraine to provide documents
and a formal response was subsequently sent by FYM noting various procedural
issues in relation to the request.

As at the date of this announcement, FYM has no additional information on the
scope of the investigation or the anticipated next steps.

 

1.1.6       Order of the President of Ukraine in respect of FBM mining
licence

Group entities involved: FBM.

On 24 June 2021, an Order of the President of Ukraine was published on the
official website of the President, which enacted the decision of the National
Security and Defence Council of Ukraine ("NSDC") on the application of
personal special economic and other restrictive measures and sanctions. FBM is
included in the list of legal entities which are subject to sanctions pursuant
to the decision.

The sanction imposed on FBM was the cancellation of the mining license for the
Galeschynske deposit, which was one of two licenses held by FBM. The order and
the decision of the NSDC do not provide any legal ground for the application
of sanctions. The sanction is limited in scope to the cancellation of the
mining license for the Galeschynske deposit (it does not impose any more
general restrictions on FBM) and it does not affect the other mining license
held by FBM.

On 15 November 2021, FBM filed a claim with the Supreme Court of Ukraine
partially to annul the Order of the President of Ukraine. On 29 October 2024,
the Supreme Court rejected FBM's claim. On 28 November 2024, an appeal against
this rejection was filed by FBM and the Grand Chamber of the Supreme Court
subsequently opened the proceedings. The Grand Chamber of the Supreme Court
rejected FBM's appeal on 28 January 2025. FBM filed a claim to the European
Court of Human Rights in May 2025.

The Galeschynske deposit is a project in the exploration phase that is
situated to the north of the Group's active mining operations. Following the
cancellation of this license, all capitalised costs associated with this
license, totalling approximately US$3.4 million, were written off in the
financial year ended 31 December 2021.

In parallel, following the termination of the Galeschynske subsoil-use permit
by the State Service of Geology and Subsoil of Ukraine on 5 July 2021, on 16
November 2021, FBM filed a claim challenging the termination. On 3 November
2025, the court of first instance rejected FBM's claim. FBM filed an appeal
against this rejection on 1 December 2025, with the appellate proceedings
commencing on 8 December 2025. The next hearing is scheduled for 11 May 2026.

FBM continues to rigorously defend its rights to the Galeschynske deposit.

 

1.2    Corporate, sanctions and cross-border regulatory matters

The claims and matters involving the Group detailed below relate to claims
being made against Mr Zhevago or the Group arising from proceedings involving
Bank F&C and/or Mr Zhevago.

Mr Zhevago is the previous Chief Executive Officer of the Group (having
stepped down from this position in 2019). Mr Zhevago remained on the Board as
a Non-executive Director until December 2022, when he stepped down following
his detention in France earlier in December 2022, and he remains one of the
discretionary beneficiaries of a trust which owns Fevamotinico. As at the date
of this announcement, Fevamotinico owns 49.32 percent of the voting shares in
the Company.

Bank F&C was a Ukrainian bank owned by Mr Zhevago which was declared
insolvent by the National Bank of Ukraine in September 2015. Bank F&C was
never a part of the Group, although the Group did have a commercial
relationship with Bank F&C (which was used by the Group as its main
transactional bank in Ukraine prior to its insolvency).

Mr Zhevago has been accused by Ukrainian authorities of embezzling US$113
million from Bank F&C prior to its insolvency. Mr Zhevago has consistently
and strenuously denied all wrongdoing, labelling the cases as politically
motivated. In connection with such accusations, Mr Zhevago was placed on an
international wanted list by Ukrainian authorities and was detained in France
at Ukraine's request in December 2022 (at which point Mr Zhevago resigned from
his role as a director of the Company). The French courts denied an
extradition request in 2025. The Ukrainian authorities have also imposed
various sanctions on Mr Zhevago in February 2025. These sanctions are personal
in nature to Mr Zhevago and the sanctions have not been imposed directly on
the Group. However, the personal sanctions imposed on Mr Zhevago and his
assets have had and continue to have an adverse impact on the Group. For
example, the Group has received formal communication from the Ukrainian tax
authorities indicating that VAT refunds are currently not payable to the Group
due to these personal sanctions on Mr Zhevago. See paragraph 1.4.3 (VAT
disputes with the State Tax Service of Ukraine) of this Appendix B.

The Group understands that the underlying disputes involving Bank F&C and
Mr Zhevago remain unresolved. Mr Zhevago is not a director, officer, employee
or consultant to any company in the Group and, apart from his indirect
connection to Fevamotinico, he is no longer connected to the Group.

 

1.2.1       Restrictions on certain corporate rights in all of the
Group's Ukrainian subsidiaries in connection with the Bank F&C
investigation

Group entities involved: Ferrexpo plc, Ferrexpo AG & Ferrexpo Ukrainian
Subsidiaries.

Share freeze in relation to claim from the Ukrainian Deposit Guarantee Fund
("DGF"): On 3 March 2023, a court of first instance in Ukraine (while hearing
the dispute between the DGF and Mr Zhevago in relation to the liquidation of
Bank F&C in 2015) ordered the arrest (freeze) of 50.3 percent of Ferrexpo
AG's ("FAG") shareholding in each of FPM, FYM and FBM. In addition to this
arrest (freezing), the court order also contains a prohibition on Fevamotinico
disposing of its shares in the Company and the Company disposing of any of its
shares in FAG. As at the date of this announcement, the Group has no
intention, and never has had any intention, of disposing of its shares in FPM,
FYM, FBM or FAG. The Group does not expect an impact on its mining or other
operations because of this court order.

The Group's subsidiaries affected by this court order, including FAG, have
filed appeals to remove the restrictions. The court of appeal dismissed the
appeals and the decision of the court of appeal was upheld by the Supreme
Court of Ukraine on 10 January 2024. Therefore, the restrictions remain
effective.

On 31 July 2024, a court of first instance agreed to commence economic
examination to be performed by an independent expert institution to assess the
amount of damages of Bank F&C in the main dispute. The proceedings in the
main dispute remain suspended, until an expert opinion is received.

Management considers that the court order dated 3 March 2023 to arrest
(freeze) 50.3 percent of FAG's shareholding in each of FPM, FYM and FBM
contravened Ukrainian law because that 50.3 percent shareholding is the
property of FAG and not of any other person as a matter of Ukrainian law.

Share freeze in relation to investigation in connection with Bank F&C: On
25 March 2024, the Group became aware of a court order dated 18 January 2024
regarding further restrictions on certain corporate rights concerning all of
the Group's Ukrainian subsidiaries. According to the January 2024 court order
these restrictions were imposed in September 2023 on 49.5 percent of the
shares in all of the Group's Ukrainian subsidiaries, except for Nova Logistics
LLC and TIS-Ruda LLC, an associated company of the Group, where the relevant
percentages restricted are 25.2 percent and 24.7 percent, respectively. The
Group understands the restrictions have been imposed in connection with
ongoing court actions relating to Bank F&C.

The restrictions do not affect ownership of the relevant shares, but prohibit
their transfer and restrict the right to exercise corporate rights otherwise
attaching to such shares, including restrictions on the right to vote and
receive dividends. On 21 May 2024, FAG filed an appeal against the court order
imposing the restrictions. On 30 January 2025, the court of appeal rejected
FAG's appeal. As a result, the restrictions remain in place.

On 4 March 2025, the SBI made a media statement that the Pecherskyi District
Court of Kyiv had granted a request of the Office of the Prosecutor General to
transfer 49.5 percent of the corporate rights in FPM held by FAG to ARMA. The
statement also makes reference to the transfer to ARMA of corporate rights in
a further 15 undisclosed legal entities. The SBI statement notes that the
transfer of the corporate rights in FPM was in connection with ongoing legal
cases in Ukraine relating to the alleged embezzlement of funds from Bank
F&C.

On 30 April 2025, ARMA announced the commencement of market consultations for
the appointment of asset managers in respect of corporate rights and assets
potentially to be transferred to ARMA. On 9 October 2025, ARMA announced the
start of market consultations concerning the arrested 49.5 percent of
corporate rights in FPM.

As at the date of this announcement, no member of the Group has received any
official documents or requests from the Ukrainian authorities with regard to
the decision of the Pecherskyi District Court of Kyiv and has not seen a copy
of the court decision. The details of the court decision are therefore unclear
at the date of this announcement.

Based on independent legal advice from Ukrainian counsel, management
understands that FAG remains the 100 percent owner of FPM. If ARMA does
appoint a third-party manager to manage 49.5 percent of the corporate rights
in FPM, according to current Ukrainian legislation, that manager would need to
obtain consent from FAG for any corporate actions for the duration of the
relevant arrest imposed within the relevant criminal proceedings. Based on
article 21 of the Law on ARMA, the manager is obliged to coordinate with the
owner of those shares (i.e. FAG) regarding the exercise of their management
powers in respect of voting at any shareholder meetings. This rule means that
the manager cannot vote at the shareholders meeting on its own, but only with
the consent of the owner, FAG. If the manager (once appointed) takes steps
which are not in accordance with Ukrainian legislation, FAG may seek to
challenge such actions in the Ukrainian courts.

The SBI statement relating to a transfer to ARMA on 4 March 2025 followed a
separate press release made by the SBI on 20 February 2025 which stated that
it was preparing to lodge a claim together with Ukraine's Ministry of Justice
(the "MoJ") to the HAAC, to nationalise (confiscate) 49.5 percent of shares in
FPM and certain of its assets.

Based on independent legal advice from Ukrainian counsel, the legal basis for
such an approach appears uncertain. The HAAC does not adjudicate
nationalisation matters; its jurisdiction is rather confined to asset-recovery
sanctions, which constitute a distinct legal regime. Moreover, the SBI, acting
within the framework of its governing legislation, does not have express
authority to initiate or pursue such claims before the HAAC.

Procedurally, asset recovery may be pursued only by the MoJ on the basis of
specific personal special economic and other restrictive measures (sanctions)
imposed on the relevant person. If such a claim is upheld by the HAAC, the
relevant assets (which may include shares) would be recovered to the benefit
of the state (i.e. resulting in a transfer of ownership to the state). As a
general rule, management of such recovered assets is exercised by the State
Property Fund of Ukraine, unless another state body is designated by the
Cabinet of Ministers of Ukraine.

Second share freeze in relation to another investigation in connection with
Bank F&C: During a routine verification of data on the Group's Ukrainian
subsidiaries in the Ukrainian Companies Register carried out in March 2026, it
was discovered that the Pecherskyi District Court of Kyiv issued a new arrest
(freeze) of corporate rights in the Group's Ukrainian subsidiaries in
connection with the Bank F&C investigation on 23 December 2025 (published
on 5 March 2026).

This arrest applies to 49.5 percent of the corporate rights in the Group's
Ukrainian subsidiaries. It relies on the mechanism of "Special Confiscation",
a process under Ukrainian law which allows the State to seize assets directly
linked to a criminal offence, including where the property is obtained as a
result of the commission of the offence or income derived therefrom, property
used as a tool or instrument of the offence, or property intended for
financing the offence or as a reward for its commission. Special confiscation
can extend to property owned by third parties, provided the owner knew or
ought to have known of its origin or intended use in connection with the
offence.

Execution of "Special Confiscation" requires a final court decision in the
criminal proceedings but is not confined to a guilty verdict. Special
confiscation may be ordered following a guilty verdict of the court; a court
ruling closing the criminal proceedings on non-exonerating grounds, including
release from criminal liability; or a ruling imposing criminal-law measures
upon a legal entity. In each case this ruling can only occur after examination
of the merits of the case, which has not yet occurred. The arrest (freeze)
does not immediately affect ownership rights but may restrict voting rights,
dividend rights and the ability to transfer shares.

FAG has filed an appeal on 3 April 2026. The first hearing by the court of
appeal is scheduled for 19 May 2026.

 

1.2.2       Enforcement proceedings relating to restrictions on certain
corporate rights in principal Ukrainian operating subsidiaries in connection
with claim against Mr Zhevago relating to Bank F&C personal surety

In addition to the case initiated by the DGF as described in paragraph 1.2.1
(Restrictions on certain corporate rights in all of the Group's Ukrainian
subsidiaries in connection with the Bank F&C investigation) of this
Appendix B, there is commercial litigation in Ukraine between the National
Bank of Ukraine ("NBU") and Mr Zhevago in relation to a personal surety
(guarantee) given by Mr Zhevago for a loan provided by the NBU to Bank F&C
prior to Bank F&C's insolvency. This claim reached a final decision of the
Ukrainian courts in 2020, however the judgment debt was not satisfied by Mr
Zhevago.

As a consequence of this commercial litigation involving Mr Zhevago and his
unpaid debt, in September 2023 the Chief State Bailiff of the Ministry of
Justice of Ukraine ("State Bailiff") issued a resolution to arrest (freeze)
property of Mr Zhevago. This was stated to include 50.3 percent of the issued
share capital of FYM and of FBM, which are owned by FAG. Such decision was
made based on the assumption (which the Company contests) that these corporate
rights are owned by Mr Zhevago.

In October 2023, FAG filed a civil claim seeking to cancel the arrest
(freezing) order in relation to the shares in FYM and FBM and a motion to
block the enforcement procedure initiated by the State Bailiff in relation to
a potential sale of shares.

On 30 November 2023, a court of first instance in Ukraine granted FAG's motion
and suspended the enforcement procedure, prohibiting the State Bailiff from
taking any further actions to forcibly sell FAG's corporate rights in FYM and
FBM (the "interim measures"). On 1 July 2024, the court of appeal lifted the
interim measures. FAG subsequently filed an appeal to the Supreme Court of
Ukraine, but this appeal was rejected on 21 May 2025. As a result, there is no
current suspension of enforcement procedures and the State Bailiff may proceed
with the sale of corporate rights in FYM and FBM.

In parallel with these appeals relating to suspension of enforcement, a court
of first instance was considering FAG's claim to cancel the arrest (freezing)
order. After several hearings in 2025, the judge closed the proceedings during
a hearing on 28 May 2025, effectively refusing FAG's claim to cancel the
arrest (freezing) order. This matter remains subject to appeal by FAG and is
currently before the Supreme Court on a matter of law. By a ruling dated 14
January 2026, the case was scheduled for judicial consideration by a panel of
five judges.

In addition, in August 2024 the Group became aware that the Department of
State Enforcement Service of the Ministry of Justice of Ukraine (the "State
Enforcement Service") had issued a resolution arresting (freezing) certain
corporate rights relating to 49.3 percent of shares in FPM held by FAG. On 15
August 2024, FAG filed a claim to remove this arrest (freezing). Initially, a
court of first instance refused to open the case, but this decision was
overturned on 5 February 2025 following a successful appeal by FAG to the
court of appeal. The NBU subsequently filed an appeal to the Supreme Court of
Ukraine, which was rejected by the Supreme Court. The case remains ongoing and
the next hearing by the Pecherskyi District Court of Kyiv, which is expected
to deal with procedural matters, is scheduled for 26 May 2026.

On 17 September 2024, a new arrest (freezing) of the same 49.3 percent of
shares in FPM was imposed by the State Enforcement Service. FAG filed a claim
to lift the new arrest (freezing) order. On 23 October 2024, a court of first
instance refused to open the case, but this decision was overturned on 16
January 2025 following a successful appeal by FAG to the court of appeal. The
NBU subsequently filed an appeal to the Supreme Court, which was rejected by
the Supreme Court on 19 March 2025. As a result, the decision of the court of
appeal remains in force and the case was returned to the Pecherskyi District
Court of Kyiv. The first court hearing took place on 16 June 2025 and on 19
June 2025 this case was merged with the first case relating to 49.3 percent of
shares in FPM.

Given the relevant proceedings against Mr Zhevago have been concluded and the
arrest has moved to an enforcement stage, this creates a more immediate risk
of such assets being forcibly sold in the enforcement proceedings. If the
enforcement processes are not interrupted, this could ultimately lead to a
potential sale of shares (by way of auction) representing 50.3 percent of the
issued shares in each of FYM and FBM and 49.3 percent of the issued shares in
FPM, notwithstanding that they are assets of the Group and not Mr Zhevago
personally.

 

1.2.3       Contested sureties claim

Group entities involved: FPM.

On 7 December 2022, FPM received a claim in the amount of UAH4,727 million
(approximately US$111.5 million) relating to contested sureties. The
counterparty, Maxi Capital, alleges that it acquired rights under certain loan
agreements originally concluded between Bank F&C and various borrowers
through an assignment agreement with the State Guarantee Fund on 6 November
2020, and further claims that FPM provided sureties to Bank F&C to secure
performance under these loan agreements.

A court of first instance in Ukraine made an award in favour of Maxi Capital
on 9 August 2023, and this decision was upheld by the court of appeal on 26
January 2024. On 30 January 2024, FPM lodged an appeal to the Supreme Court of
Ukraine. As at the date of this announcement, the case is under review by the
Supreme Court of Ukraine (with a united panel of judges on 20 March 2026
having decided to return the case back to the previous panel of judges for
consideration). On 13 April 2026, a procedural motion of Maxi Capital to
recuse the current panel of judges was denied and the proceedings were
adjourned. The next hearing is scheduled for 1 May 2026.

On 1 April 2024, the Supreme Court suspended possible enforcement of the
appellate decision against FPM. However, on 9 May 2025 Maxi Capital filed an
application with the Commercial Court of Poltava Region to initiate bankruptcy
proceedings against FPM and this application was granted and bankruptcy
proceedings were opened on 24 February 2026 (see further below).

Notwithstanding the two negative court decisions of the lower courts,
management remains of the view that the Maxi Capital claim is without merit
and FPM has compelling arguments to defend its position before the Supreme
Court.

However, considering the magnitude of this claim and the risks associated with
the judicial system in Ukraine, a full provision in the amount of UAH4,727
million (approximately US$111.5 million) was initially recorded as at the end
of the financial year ended 31 December 2023, and the provision remained in
place as at 31 December 2025.

If the final ruling of the Supreme Court is not in favour of FPM, this could
have a material negative impact on the Group's business activities and its
ability to continue as a going concern.

Bankruptcy proceedings against FPM

On 24 February 2026, a local court of first instance in Ukraine ruled to open
bankruptcy proceedings against FPM pursuant to an application by Maxi Capital.
As part of this ruling, the court has appointed an insolvency manager over
FPM. This decision was made notwithstanding that the underlying contested
sureties claim remains under review by the Supreme Court of Ukraine and the
Supreme Court of Ukraine's order on 1 April 2024 to suspend enforcement in the
contested sureties claim.

Following the official publication of FPM's bankruptcy announcement on 24
February 2026, the insolvency manager started compiling a list of creditor
claims in accordance with the relevant Ukrainian regulations. FYM, Ferrexpo
Finance plc and Ferrexpo AG have each submitted creditor's claims to the FPM
insolvency manager. The existing FPM management team remains in place and
continues to operate the business.

FPM filed an appeal against the decision to open bankruptcy proceedings. The
first appeal hearing on 9 April 2026 was adjourned, and the next hearing is
scheduled for 30 April 2026. However, the filing of an appeal does not suspend
the ongoing bankruptcy proceedings.

 

1.2.4       Share freeze in relation to undisclosed criminal
investigation

During a routine verification of data on the Group's Ukrainian subsidiaries in
the Ukrainian Companies Register carried out on 4 February 2026, it was
discovered that the High Anti-Corruption Court of Ukraine ordered the arrest
(freeze) of corporate rights in all of the Group's Ukrainian subsidiaries,
except for LLC TIS-Ruda, in a criminal proceeding to which none of the Group
companies are parties.

The court order was not published in the Ukrainian State Register of Court
Decisions to preserve the confidentiality of the pre-trial investigation, and
none of the Group companies received any order in connection with this arrest
(freeze) of corporate rights. Details of the criminal case, including the
percentage of corporate rights subject to the arrest (freeze), are therefore
unavailable at the date of this announcement.

However, under Ukrainian law arrest (freezing) orders do not affect ownership
of the relevant shares but typically prohibit their transfer and in addition
may restrict the right to exercise corporate rights such as voting rights and
the right to receive dividends.

 

1.3    Minority shareholder matters

1.3.1       Challenge of squeeze-out of FPM minority shareholders

Group entities involved: FPM.

Prior to 2019, the Group owned 99.1 percent of the issued share capital of FPM
with the remaining 0.9 percent being held by third party minority investors.
In 2019, the Group exercised a mandatory squeeze-out procedure under Ukrainian
law to acquire the remaining 0.9 percent of the FPM shares to allow FPM to
become a wholly-owned subsidiary. Following the completion of squeeze-out
procedures, two former minority shareholders challenged the valuation of the
shares of FPM. This valuation formed the basis for a mandatory buy-out of
minority shareholders according to Ukrainian law.

On 19 September 2023, a court of first instance ruled in favour of the two
former minority shareholders and decided that FPM should pay UAH136 million
(approximately US$3.2 million) in aggregate to the claimants. The court of
appeal upheld this decision on 21 February 2024. Following an appeal by FPM,
on 3 June 2024, the Supreme Court cancelled both decisions and referred the
case back to a court of first instance for a new hearing.

The case was heard again by the Commercial Court of Poltava Region, which
ruled on 10 April 2025 that an amount of UAH136 million (approximately US$3.2
million) should be paid to the two former minority shareholders.

On 4 September 2025, a court of appeal rejected an appeal filed by FPM against
this order. In September 2025, FPM filed an appeal on a matter of law to the
Supreme Court.

On 6 October 2025, the Commercial Court of Poltava Region issued orders to
enforce its decision dated 10 April 2025. On 7 October 2025, a private bailiff
in Ukraine - acting upon the application of one of the two former FPM minority
shareholders - opened enforcement proceedings and froze property of FPM to
recover funds from FPM in the amount of UAH84 million (approximately US$2.0
million). Subsequently, on 8 October 2025, the private bailiff was able to
freeze bank accounts of FPM in an attempt to recover the funds.

On 28 October 2025, the Supreme Court decided to open appeal proceedings on a
matter of law and scheduled a court hearing for 19 November 2025 suspending
the enforcement of the previous decisions. This means that those previous
decisions cannot be enforced until the Supreme Court has finished its review.
On 17 December 2025, the Supreme Court issued a ruling granting the cassation
appeal (i.e., an appeal on a point of law) of FPM in the case of former
minority shareholders of FPM. The Supreme Court decided to return the case to
a court of first instance for a new consideration. As a result of the Supreme
Court decision, the enforcement proceedings were closed and the freezing of
FPM bank accounts by the private bailiff was cancelled. On 26 March 2026 the
materials of the case were transferred for consideration in bankruptcy
proceedings against FPM. See further paragraph 1.2.3 (Contested sureties
claim) of this Appendix B.

The Group recorded a full provision in the amount of UAH136 million
(approximately US$3.2 million) for the claimed compensation which was
initially recorded as at the end of the financial year ended 31 December 2023,
and the provision remained in place as at 31 December 2025.

 

1.3.2       Second compensation claim for the squeeze-out of minority
shareholders of FPM

Group entities involved: FPM.

On 28 August 2025, the Commercial Court of Poltava Region received a statement
of claim from nine claimants seeking compensation for shares of FPM acquired
in the squeeze-out procedure in the total amount of approximately UAH58
million (approximately US$1.4 million).

On 14 October 2025, the court suspended proceedings in this case pending the
final decision by the Supreme Court of Ukraine in the related legal matter
described above. See further paragraph 1.3.1 (Challenge of squeeze-out of FPM
minority shareholders) of this Appendix B.

 

1.3.3       Claim in respect of a share sale and purchase agreement for
a 40.19 percent stake in FPM

Group entities involved: FPM and FAG.

In 2020, the Kyiv Commercial Court reopened court proceedings in relation to
historic shareholder litigation.

This historic shareholder litigation started in 2005, when a former
shareholder in FPM brought proceedings in the Ukrainian courts seeking to
invalidate a share sale and purchase agreement concluded in 2002 pursuant to
which a 40.19 percent stake in FPM was sold to nominee companies that were
previously ultimately controlled by Mr Zhevago, amongst other parties (the
"2002 SPA"). After a long period of litigation, all historic claims were fully
dismissed in 2015 by the Higher Commercial Court of Ukraine.

In January and February 2021, claims were filed by former shareholders in FPM
seeking to invalidate the 2002 SPA. Those claims were similar to the previous
claims made back in 2005. In May 2021, the Kyiv Commercial Court ruled in
favour of FAG but this decision was subsequently overturned by the court of
appeal which ruled in favour of the claimants. On 19 April 2023, the Grand
Chamber of the Supreme Court ruled in favour of FAG.

In May 2023, the National Anti-Corruption Bureau of Ukraine ("NABU") and the
Specialised Anti-Corruption Prosecutor's Office ("SAPO") accused the Head of
the Supreme Court of Ukraine of bribery. These allegations made reference to
the above ruling made by the Supreme Court on 19 April 2023 and Mr Zhevago.
Investigations by NABU and SAPO are underway into the conduct of the former
Head of the Supreme Court and a lawyer who allegedly acted as the intermediary
in the alleged bribery. On 3 August 2023, NABU announced that Mr Zhevago had
been issued with a notice of suspicion in NABU's and SAPO's investigation. If
the Ukrainian Anti-Corruption Court concludes that a judge received a bribe
for the favourable decision in the share dispute case, and such verdict of the
Anti-Corruption Court remains valid after any potential appeal, then the
claimants in the share dispute case may apply to the Supreme Court to review
the ruling made by the Supreme Court on 19 April 2023. In February 2024, all
four claimants were dissolved according to the records at UK Companies House.
As at the date of this announcement, no allegations have been made against the
Group in connection with the alleged bribery and it is currently not possible
to anticipate future developments in this case with any certainty.

If the share dispute case were to be reviewed by the Grand Chamber of the
Supreme Court once again, based on advice from Ukrainian legal counsel,
management remains of the view that FAG has compelling legal arguments to
defend its position. However, more general concerns surrounding the
independence of the judicial system and its immunity from economic and
political influences in Ukraine means there remains a residual risk of a
negative outcome.

 

1.3.4       Restrictions imposed by Swiss Office of the Attorney General
over Ferrexpo AG shares

On 13 February 2026, the Swiss Office of the Attorney General issued a
provisional order to the management bodies of Ferrexpo AG to prohibit Ferrexpo
AG from issuing new shares and from consenting to the sale or transfer of
existing shares in Ferrexpo AG.

The proceedings are based on a request for legal assistance from NABU to
Switzerland made on 4 November 2025. The request for legal assistance states
that the proceedings are based on the suspicion that Mr Zhevago, with the
assistance of his lawyer, granted an unlawful advantage to the former
president of the Supreme Court of Ukraine, in order to influence proceedings
in the above-mentioned claim relating to the share sale and purchase agreement
for a 40.19 percent stake in FPM.

On 26 February 2026, Ferrexpo AG filed an appeal to the Swiss Federal Criminal
Court against the aforementioned restrictions, which remains ongoing. As at
the date of this announcement, the appeal process is still ongoing.

 

1.4    Tax and transfer pricing matters

1.4.1       Transfer pricing investigation by the State Bureau of
Investigations and the ongoing criminal proceedings initiated by the Economic
Security Bureau of Ukraine

Group entities involved: FPM & FYM.

Currently, there is one investigation by the SBI in criminal matters which
relates to transfer pricing. The other ongoing criminal proceedings initiated
by the ESBU on transfer pricing matters are disclosed in paragraph 1.1.1
(Underpayment of iron ore royalties claims by the State Tax Service of Ukraine
and the Office of the Prosecutor General) of this Appendix B.

SBI case (№ 4201800000002320 dated 19 September 2018) (2014-2017 financial
years)

In 2024, the SBI started investigating the same transfer pricing matters as
the ESBU, albeit with a wider scope additionally encompassing: i) 2014
financial year; ii) money laundering; iii) additional persons, including FYM,
management of FPM and Mr Zhevago, who is considered by certain authorities in
Ukraine to be the Company's ultimate beneficial owner.

The reason why the same matters are the subject of criminal investigation by
the SBI and subject of criminal proceedings initiated by the ESBU is unknown.

FPM was notified about the SBI criminal proceedings in October 2024 after the
SBI obtained the ruling of Pecherskyi District Court of Kyiv dated 12
September 2024 granting it temporary access to the documents of FPM.

As at the date of this announcement, FPM has no additional information on the
scope of the investigation or the anticipated next steps.

 

1.4.2       Transfer pricing tax disputes with the State Tax Service of
Ukraine

Group entities involved: FPM & FYM.

Following the completion of two transfer pricing audits in Ukraine by the
State Tax Service of Ukraine, the Group's two major subsidiaries received
claims from the State Tax Service of Ukraine in the aggregate amounts of
UAH2,162 million (approximately US$51.0 million), including fines and
penalties, and UAH259 million (approximately US$6.1 million), excluding fines
and penalties.

The Group remains of the view that the terms of its cross-border transactions
comply with applicable legislation in the relevant jurisdictions.

FPM

On 28 February 2024, a court of first instance opened a case in relation to
the claim filed by FPM to challenge tax notification decisions dated 27
November 2023. On 30 July 2025, the court ordered an expert to conduct a
judicial economic examination and suspended the proceedings. The tax authority
filed an appeal against this order, which was rejected by the court of appeal
on 22 October 2025. The case materials have since been transferred to the
expert institution for examination. The expert examination is anticipated to
take between six months and two years, depending on the workload of the expert
institution. During the expert examination period, the court proceedings
remain suspended.

FYM

On 7 May 2024, a court of first instance opened a case in relation to the
lawsuit filed by FYM. On 30 October 2025, the court ordered an expert to
conduct a judicial economic examination and suspended the proceedings. The tax
authority filed an appeal. On 3 February 2026, the court of appeal rejected
the appeal of the tax authority. The case materials have since been
transferred to the expert institution. The expert examination is anticipated
to take between six months and two years. During the expert examination
period, the court proceedings remain suspended.

 

1.4.3       VAT disputes with the State Tax Service of Ukraine

Group entities involved: FPM, FYM & FBM.

Following the personal sanctions imposed by Ukrainian authorities on Mr
Zhevago on 12 February 2025, the Group's subsidiaries in Ukraine have not been
receiving VAT refunds since March 2025.

From March 2025, FPM and FYM started to receive on a monthly basis
notifications from the State Tax Service of Ukraine ("STS") of a decision to
suspend the VAT refunds for each month when VAT was claimed for refund.

FPM filed claims against the STS in relation to the suspended VAT refunds for
the months of January to December 2025 (inclusive). FYM filed claims against
the STS in relation to the suspended VAT refunds for January, February, March,
April, May, July and November 2025.

On 11 February 2026, FPM received its first favourable decision from the
Supreme Court of Ukraine in relation to the VAT refund for the month of
February 2025 only for UAH230 million (approximately US$5.4 million). However,
as at the date of this announcement, no VAT amount has been refunded to FPM.

In FPM and FYM litigations in relation to VAT refunds for other months, the
courts of first instance and appeal made favourable decisions; however, these
matters have not yet been subject to review by the Supreme Court. The Group is
continuing to progress various claims in the Ukrainian courts relating to VAT
refunds for FPM and FYM.

Despite these positive court rulings, no VAT was refunded yet. It is
reasonably expected that VAT refunds could potentially resume only following
the lifting of personal sanctions imposed on Mr Zhevago or when Ukrainian
authorities comply with final favourable court decisions or if the Tax Code is
amended to remove such restriction. As at 31 December 2025, VAT refunds in the
aggregate amount of UAH2,599 million (approximately US$61.3 million) were
suspended by the STS. Following the continuation of suspension of VAT refunds
into 2026, as at 31 March 2026, the Group's net VAT receivable balance in
Ukraine had increased to US$90.3 million. Of this amount, as at the date of
this announcement, US$78.9 million had been claimed for refund from the
Ukrainian tax authorities for the period from January 2025 to March 2026, and
US$69.4 million of the refunds (representing the period from January to
December 2025) were refused by the tax authorities in Ukraine because of the
association of the Group with Mr Zhevago as a consequence of personal
sanctions imposed on him by the Ukrainian authorities. The absence of VAT
refunds does have a material impact on the Group's cash flow generation and
available liquidity and, as a consequence, on the Group's ability to continue
as a going concern.

Separately, in 2023, FBM received notifications from the Ukrainian tax
authorities suspending VAT refunds for July and August 2023, in an aggregate
amount of UAH40.1 million (approximately US$0.9 million). The Supreme Court of
Ukraine ruled in favour of FBM in November 2024 (for the July 2023 VAT refund)
and January 2025 (for the August 2023 VAT refund); however, the VAT has not
yet been refunded to FBM, and the Group does not have information on when this
amount will be refunded.

 

1.5    Media and defamation matters

1.5.1       Claim by Maxi Capital Group relating to alleged
dissemination of inaccurate information in media publications

Group entities involved: Ferrexpo plc.

On 5 April 2024, Maxi Capital Group LLC filed a lawsuit against the Company,
Ukrainian News Information Agency LLC, Kartel PJSC, Apostrof TV LLC, and
Internet Invest LLC seeking recognition of certain information published by
the defendants on 20 March 2024 relating to the Maxi Capital litigation
against FPM as unreliable and an order for its refutation. See further
paragraph 1.2.3 (Contested sureties claim) in this Appendix B.

On 19 November 2024, a court of first instance ruled against the Company. No
monetary fine was imposed; however, the court instructed the Company to
publicly refute the dissemination of the information across all media in which
it had been published. On 20 December 2024, the Company filed an appeal and on
24 July 2025 the court of appeal dismissed the Company's appeal.

On 13 August 2025, the Company filed an appeal on a matter of law with the
Supreme Court of Ukraine. On 5 November 2025, the Supreme Court rejected the
Company's cassation appeal, and the case has now been closed.

 

1.6    International treaty claims

1.6.1       Breaches of UK-Ukraine BIT and the Swiss-Ukraine BIT

As a result of the actions and conduct of Ukraine including in relation to
some of these proceedings detailed above, which are considered by the Group to
constitute breaches of Ukraine's obligations under international investment
agreements in place, namely the UK-Ukraine BIT and the Swiss-Ukraine BIT, the
Company and Ferrexpo AG sent to the Government of Ukraine on 19 March 2025 a
formal written notification of potential claims under the UK-Ukraine BIT and
the Swiss-Ukraine BIT. These obligations include 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. The purpose of the notification was to
explain how Ukraine's actions constitute breaches of Ukraine's obligations
under the UK-Ukraine BIT and Swiss-Ukraine BIT, to request that Ukraine
procure the lifting and cessation of the unlawful actions, and to request the
Government of Ukraine to enter into negotiations.

 

 

APPENDIX C

Summary Unaudited Results for the year ended 31 December 2025

 

This Appendix C contains summary unaudited, consolidated financial statements
for the year ended 31 December 2025. These financial results are unaudited and
remain subject to completion of the Group's auditors' audit procedures as well
as approval of the Company's Audit Committee and the Board. As at the date of
this announcement, the summary unaudited, consolidated financial results have
been prepared on a going concern basis, however, such basis of preparation is
contingent on the successful completion of the Intended Fundraise. As a
result, the summary unaudited, consolidated financial results are condensed
and the presentation is not prepared on a basis consistent with the one that
will be adopted in the annual accounts for the year ended 31 December 2025.
Neither this Appendix C nor the announcement constitutes a preliminary
statement of annual results as contemplated by UKLR 6.1.5R, nor statutory
accounts under the Companies Act 2006. The financial information for the year
ended 31 December 2024 has been extracted from the statutory accounts for that
year. The audited statutory accounts for the year ended 31 December 2024 have
been delivered to the Registrar of Companies. The auditors' report on the 2024
statutory accounts was (i) unqualified, (ii) did not contain a statement under
section 498(2) or 498(3) of the Companies Act 2006, but (iii) included a
separate section with regard to material uncertainties related to going
concern.

As at the date of this announcement there can be no certainty that the Group
will be successful in executing the Intended Fundraise. If the Group does not
execute the Intended Fundraise then the results set out below may change
materially.

 

Summary - consolidated income statement

The following table sets out a condensed summary of the Group's unaudited
income statement for the years ended 31 December 2025 and 2024, both prepared
on a going concern basis:

 (Rounded to the nearest US$ million, unless otherwise stated)  2025   2024  Change
 Total sales volume (mt)                                        6.6    6.8   -4%
 Iron ore fines price (US$/t Fe 65%)                            115    123   -7%
 Revenue                                                        787    933   -16%
 Total production volume (mt)                                   6.1    6.8   -9%
 C1 cash costs (US$/t)                                          76.3   77.5  -2%
 C4 cash costs (US$/t)                                          50.3   55.3  -9%
 Write offs and impairment losses                               -161   -72   124%
 Operating forex gains                                          5      83    -94%
 Operating (loss)/profit                                        -197   18    -1219%
 Non-operating forex gains/(losses)                             0      -39   -101%
 Income tax expense                                             -11    -30   -63%
 (Loss)/profit for the period                                   -211   -50   322%
 Diluted (loss)/earnings per share (cents)                      -35.8  -8.5  321%

 

 

 

 

 

 

 

 

 

 

Key figures - consolidated statement of financial position

The following table sets out key balances from the Group's unaudited
consolidated statement of financial position as at 31 December 2025 and 2024,
both prepared on a going concern basis:

 (Rounded to the nearest US$ million)                   2025  2024   Change
 Total assets, including                                946   1,187  -241
 Property, plant and equipment                          552   724    -172
 Inventories                                            141   198    -57
 Trade and other receivables                            34    40     -6
 Other taxes recoverable and prepaid                    88    36     52
 Cash and cash equivalents                              58    106    -48
 Total liabilities, including                           229   263    -34
 Lease liabilities                                      11    5      6
 Trade and other payables                               27    56     -29
 Income taxes payable                                   21    14     7
 Provision for legal disputes                           115   116    -1
 Equity attributable to equity holders of Ferrexpo plc  716   924    -208

 Net cash position                                      47    101    -54

 

Summary - consolidated statement of cash flow

The following table sets out a condensed summary of the Group's unaudited
statement of cash flow for the years ended 31 December 2025 and 2024, both
prepared on a going concern basis:

 (Rounded to the nearest US$ million)      2025  2024  Change
 Underlying EBITDA                         28    69    -60%
 Working capital (outflow)/inflow          -26   52    -151%
 Income tax paid                           -3    -23   -88%
 Other (including non-cash forex effects)  4     -6    -181%
 Net cash flow from operating activities   3     92    -96%
 Capital investment                        -49   -102  -52%
 Debt repayments (leases)                  -5    -6    -19%
 Other (including translation difference)  3     7     -54%
 Cash and cash equivalents                 58    106   -45%
 Lease liabilities                         -11   -5    117%
 Net cash position                         47    101   -53%

 

Alternative Performance Measures

When assessing and discussing the Group's reported financial performance,
financial position and cash flows, management may refer to APMs that are not
defined or specified under the IFRS. APMs are not uniformly defined by all
companies, including those in the Group's industry. Accordingly, the APMs used
by the Group may not be comparable with similarly titled measures and
disclosures made by other companies. APMs should be considered in addition to,
and not as a substitute for or as superior to, measures of financial
performance, financial position or cash flows reported in accordance with the
IFRS. Ferrexpo refers to the following APMs in this announcement: Underlying
EBITDA and C1 and C4 cash costs.

 

 

Underlying EBITDA

The Group calculates the Underlying EBITDA as profit before tax and finance
plus depreciation and amortisation, net gains and losses from disposal of
investments and property, plant and equipment, effects from share-based
payments, write-offs and impairment losses, operating foreign exchange
gains/losses and exceptional items. The Underlying EBITDA is presented because
it is a useful measure for evaluating the Group's ability to generate cash and
its operating performance. Reconciliation to closest IFRS equivalent:

 (Rounded to the nearest US$ million, unless otherwise stated)        2025   2024  Change
 Underlying EBITDA                                                    28     69    -41
 Losses on disposal and liquidation of property, plant and equipment  1      (0)   1
 Share-based payments                                                 (1)    (0)   -1
 Write-offs and impairments                                           (161)  (72)  -89
 Depreciation and amortisation                                        (68)   (60)  -8
 Operating foreign exchange losses                                    4      83    -79
 (Loss)/profit before tax and finance                                 (199)  20    -219

C1 and C4 cash costs

Non-financial measure representing the cash cost of producing iron ore pellets
and concentrate from the Group's own ore, calculated as total cash production
costs divided by the volume of own iron ore pellets and concentrate produced.
C1 and C4 cash costs exclude non-cash items such as depreciation and inventory
movements, as well as costs related to purchased ore and concentrate. The
Group presents C1 and C4 cash cost of production as management believes these
measures provide a meaningful indicator of operational efficiency and cost
competitiveness when compared with industry peers. Reconciliation to closest
IFRS equivalent:

 (Rounded to the nearest US$ million, unless otherwise stated)  2025  2024  Change
 C1 cash costs                                                  246   470   -224
 Non-C1 cost components                                         51    53    -2
 Inventories recognised as an expense upon sale of goods        297   523   -226
 Own ore produced (mt)                                          3.2   6.1   -2.9
 C1 cash cost per tonne (US$))                                  76.3  77.5  -1.2

 C4 cash costs                                                  145   39    106
 Non-C4 cost components                                         29    4     25
 Inventories recognised as an expense upon sale of goods        174   43    131
 Own concentrate produced (mt)                                  2.9   0.7   2.2
 C4 cash cost per tonne (US$)                                   50.3  55.3  -5.0

 

Note: Following the sharp increase of the volume of concentrate produced in
the first half of 2025, the computation of the C1 cash cost per tonne was
amended so that only the costs related to the pellet production are divided by
the volume of produced pellets. Considering the further increase of the
concentrate production, the computation of C1 cash cost per tonne of the
comparative period, when the total production costs were divided by the volume
of produced pellets, was aligned to the adjusted computation in 2025, in which
production costs are split for pellets and concentrate produced and divided by
the respective production volumes.

 

Exchange Rate

Amounts in this Appendix C are stated in US dollars (US$). Balances reported
by the Group's subsidiaries have been converted from Ukrainian hryvnia (UAH)
using the exchange rate of UAH42.388 - US$1.00 as at 31 December 2025.

APPENDIX D

Definitions

The following definitions apply throughout this announcement, unless the
context otherwise requires:

 "2002 SPA"                                    the share sale and purchase agreement concluded in 2002 pursuant to which a
                                               40.19 percent stake in FPM was sold to nominee companies that were previously
                                               ultimately controlled by Mr Zhevago, amongst other parties
 "APMs"                                        Alternative Performance Measures
 "ARMA"                                        Ukraine's Asset Recovery and Management Agency
 "Bank F&C"                                    Bank Finance & Credit
 "Board"                                       the board of Directors of the Company
 "C1 cash cost of production"                  represents the cash costs of production of iron ore pellets from own ore,
                                               divided by production volume from own ore, and excludes non-cash costs such as
                                               depreciation, pension costs and inventory movements, costs of purchased ore,
                                               concentrate and production cost of gravel
 "C4 cash cost of production"                  represents the cash costs of production of iron ore concentrates from own ore,
                                               divided by production volume from own ore, and excludes non-cash costs such as
                                               depreciation, pension costs and inventory movements, costs of purchased ore,
                                               concentrate and production cost of gravel
 "Company" or "Ferrexpo"                       Ferrexpo plc, a public limited company incorporated in England and Wales with
                                               company number 05432915, whose registered office is at 55 St. James's Street,
                                               London, SW1A 1LA

 "DGF"                                         the Ukrainian Deposit Guarantee Fund
 "Directors"                                   the directors of the Company, whose names are Lucio Genovese, Fiona MacAulay,
                                               Vitali Lisovenko, Stuart Brown and Nikolay Kladiev
 "Disclosure Guidance and Transparency Rules"  the disclosure guidance and transparency rules of the FCA made under section
                                               73A of FSMA, as amended
 "ESBU"                                        the Economic Security Bureau of Ukraine
 "EU"                                          the European Union
 "FAG"                                         Ferrexpo AG
 "FBM"                                         Ferrexpo Belanovo Mining
 "FCA"                                         the Financial Conduct Authority of the United Kingdom
 "Fevamotinico"                                Fevamotinico Société à Responsabilité Limitée, the largest shareholder of
                                               the Company holding 49.32 percent of the total Ordinary Shares (excluding
                                               Ordinary Shares held in treasury) as at the date of this announcement
 "FPM"                                         Ferrexpo Poltava Mining
 "FSMA"                                        the UK Financial Services and Markets Act 2000, as amended
 "FYM"                                         Ferrexpo Yeristovo Mining
 "General Meeting"                             the general meeting of the Company to be convened to consider, and if thought
                                               fit, approve the Resolutions in the event that the Intended Fundraise is
                                               launched
 "Group"                                       the group comprising Ferrexpo and all its subsidiaries
 "HAAC"                                        the High Anti-Corruption Court of Ukraine
 "IFRS"                                        the International Financial Reporting Standards as issued by the International
                                               Accounting Standards Board
 "Intended Fundraise"                          the equity capital raise, likely to be structured as a conditional placing of
                                               new shares to existing and new institutional investors to raise a minimum of
                                               US$100 million to support the working capital position of the Group and meet
                                               the Group's short-term operational requirements while operating at a reduced
                                               level for the next 18 months
 "interim measures"                            has the meaning given in paragraph 1.2.2 (Enforcement proceedings relating to
                                               restrictions on certain corporate rights in principal Ukrainian operating
                                               subsidiaries in connection with claim against Mr Zhevago relating to Bank
                                               F&C personal surety) of Appendix B to this announcement
 "London Stock Exchange"                       London Stock Exchange plc, a public limited company registered in England and
                                               Wales with registered number 02075721, whose registered office is at 10
                                               Paternoster Square, London, EC4M 7LS
 "Maxi Capital"                                'LLC "Financial Company" "Maxi Capital Group"
 "MoJ"                                         Ukraine's Ministry of Justice
 "Mr Zhevago"                                  Kostiantyn Zhevago
 "NABU"                                        the National Anti-Corruption Bureau of Ukraine
 "NBU"                                         the National Bank of Ukraine
 "New Ordinary Shares"                         the new Ordinary Shares, being ordinary shares of nominal value £0.10 each to
                                               be issued by the Company pursuant to the Intended Fundraise
 "NSDC"                                        the National Security and Defence Council of Ukraine
 "Ordinary Shares"                             ordinary shares of nominal value £0.10 each in the capital of the Company
 "Relationship Agreement"                      the relationship agreement dated 15 June 2007, as amended, between the
                                               Company, The Minco Trust, Fevamotinico and Mr Zhevago
 "Resolution" or "Resolutions"                 any or all of the resolutions necessary to complete the Intended Fundraise
 "rubble"                                      has the meaning given in paragraph 1.1.2 (Investigations by the SBI in Ukraine
                                               and the National Police of Ukraine regarding the use of waste product by FPM
                                               and alleged illegal extraction of minerals) of Appendix B to this announcement
 "SAPO"                                        the Specialised Anti-Corruption Prosecutor's Office of Ukraine
 "SBI"                                         the State Bureau of Investigation in Ukraine
 "Shareholders"                                the holders of Ordinary Shares
 "State Bailiff"                               the Chief State Bailiff of the Ministry of Justice of Ukraine
 "State Enforcement Service"                   the Department of State Enforcement Service of the Ministry of Justice of
                                               Ukraine
 "Sterling", "£" or "GBP"                      pounds sterling, the lawful currency of the UK
 "Swiss-Ukraine BIT"                           the Switzerland and Ukraine Bilateral Investment Treaty
 "UAH"                                         Ukrainian hryvnia, the lawful currency of Ukraine
 "UK" or "United Kingdom"                      the United Kingdom of Great Britain and Northern Ireland
 "UK-Ukraine BIT"                              the United Kingdom and Ukraine Bilateral Investment Treaty
 "UK Listing Rules"                            the listing rules made by the FCA under section 73A of FSMA, as amended
 "UK Market Abuse Regulation"                  Regulation (EU) No 596/2014, as it forms part of domestic law of the United
                                               Kingdom by virtue of the European Union (Withdrawal) Act 2018
 "U.S. Securities Act"                         the U.S. Securities Act of 1933, as amended
 "United States", "U.S." or "US"               the United States of America
 "US$"                                         US dollars, the lawful currency of the United States
 "VAT"                                         value added tax

 

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