Ferrexpo mulls appointing adviser for restructuring which could involve stake sale
Ferrexpo, the UK-listed iron-ore producer, is looking into appointing an external adviser to work on a wider restructuring process than is already under way, The Sunday Times reported without identifying sources.
The restructuring options could include a cut to the dividend, cost-cutting measures or a stake sale to a party seeking a strategic investment, the report said. It noted that the company is cash-generative and may thus be an attractive prospect to a potential buyer.
The board of Ukraine-based Ferrexpo has scheduled an emergency meeting for later this week following last week’s collapse of Bank Finance and Credit, a bank which holds USD 174m of Ferrexpo’s total USD 280m cash on deposit, the report said. It noted that Ferrexpo’s share price plummeted by one-third on news of Bank F&C’s insolvency, leaving the iron-ore business with a GBP 280m (USD 435m) market cap.
Ferrexpo has net debt of USD 653m and had already entered negotiations to amend some of its loan terms prior to Bank F&C’s insolvency, the report said.
Ferrexpo is 50% owned by tycoon Kostyantin Zhevago, who also owns Bank F&C, the item stated, adding that a 24% Ferrexpo stake is owned by the investment firm BXR. Zhevago’s willingness to come up with new funds may prove key to the company’s future ownership, the report said.
Sunday Times