Ferrexpo (LSE:FXPO), a producer and exporter of premium iron ore products, has entered a $15 million unsecured loan agreement with Fevamotinico S.à r.l., its largest shareholder.
The facility carries a 9.75% annual interest rate and matures 12 months from the drawdown date.
Ferrexpo plans to repay the loan, plus accrued interest, by setting it off against amounts Fevamotinico owes the company under a separate subscription agreement upon admission, rather than through a cash payment.
The loan is subordinated, ranking behind Ferrexpo's existing unsecured creditors, and restricts the group from taking on further debt or granting security while the facility remains outstanding, subject to specified exceptions including a potential trade finance facility.
Fevamotinico has agreed not to demand cash repayment before maturity and has accepted a standstill provision barring it from petitioning for the company's winding up or insolvency during that period.
If Ferrexpo cannot repay in cash and the share-based arrangement has not been implemented, the company would need to secure alternative funding or negotiate new terms with Fevamotinico.
Fevamotinico controls 49.27% of the votes exercisable at Ferrexpo's general meetings, making the loan a related party transaction under UK Listing Rules.
News Intelligence what this means for the company
Ferrexpo has secured a $15 million subordinated loan from Fevamotinico, its 49.27%-voting shareholder, at 9.75% interest, to be repaid via share subscription rather than cash within 12 months. This follows the company's $100 million equity raise in early September and addresses cash expected to last only until early Q4 2026 absent additional funding—the loan extends the runway but does not solve the underlying need for operational cash generation or resolution of the Black Sea logistics crisis that forced production halts.
The loan is a bridge, not a fix: it buys time but is subordinated, carries debt covenants, and depends on a share subscription completing to avoid a cash repayment obligation Ferrexpo may not be able to meet. The standstill clause protects against immediate insolvency pressure, but the company remains dependent on either resuming profitable operations in Ukraine or securing further capital.
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