Court Orders Transfer of 40% stake in Ferrexpo’s Poltava GOK

Ukrainian mining company Ferrexpo has reported losing its appeal in the court dispute with former shareholders of its largest Ukrainian asset, Poltava Mining and Processing Plant, to invalidate the purchase and sale agreement for 40.19% of the company's shares. Ferrexpo said “The company has now received an appellate court ruling on the lawsuit, which says the 2002 share purchase agreement is invalid and the 40.19% stake in PGOK should be transferred to the claimants.”The company recalled that the court ruled in its favor during the initial proceedings in May 2021.Ferrexpo said it will continue to defend its interests and those of its shareholders and is exploring all options, including the right to appeal the new decision to the Supreme Court of Ukraine. It said “Based on the details of the court decision provided by the appeals court, management believes that Ferrexpo has strong arguments to defend its position.”As reported, in 2002, four nonresident companies from the VS Energy group (Gilson Investments, Calefort Developments, Emsworth Assets and Trimcroft Service) sold their combined 40.19% stake in PGOK to entities related to Ferrexpo's current majority owner, Mr Konstantin Zhevago. This was followed by several secondary offerings, as a result of which and a series of other resales, as well as a squeeze-out of shares from minority shareholders, Ferrexpo, listed on the London Stock Exchange, became the sole shareholder of PGOK.In 2005, these four companies filed a lawsuit seeking to invalidate the sale and purchase agreement and to carry out an additional issue of shares. At the same time, Gilson sought to restore its stake in PGOK at 6.59%, Emsworth and Calefort at 12.14% each, and Trimcroft Services at 9.32%. In February 2015, the Supreme Economic Court of Ukraine upheld an earlier decision of the country's Supreme Court and PGOK's position in the corporate dispute, which lasted about 10 years, rejecting the plaintiffs.However, at the end of 2020, the former PGOK shareholders again appealed the deal.