RE: RNS7 May 2024 10:04
LLC PCC "Kysen" ("Kysen") update
A rescheduled preparatory hearing on 29 April 2024 at the Commercial Court in Poltava Oblast (the "Court") to consider the application from Kysen, (as previously announced on 11 and 25 March 2024), was postponed. A preparatory hearing is now rescheduled for 4 June 2024.
Bail in connection with royalty related investigation
As previously reported in the Group's 2023 full year financial results, on 31 October 2023 a notice of suspicion was delivered to a senior manager of FPM (Viktor Lotous, the General Director and Chair of the FPM Management Board), regarding accusations for the potential underpayment of iron ore royalties. On 13 November 2023, a court of first instance approved a bail for Mr. Lotous for approximately UAH 800 million (approximately US$20 million). An appeal was filed and on 29 April 2024 the Kyiv Court of Appeal approved a bail of UAH 650 million (approximately US$16.5 million). The court did not provide any rationale for the high bail amount, nor its alignment with the financial standing of the suspect. This bail is separate to the previous bail amounts which were disclosed in the Company's announcement made on 2 November 2023, relating to a different investigation concerning the sale of waste products.
Following a detailed assessment of the position by the Board of Directors of the Company, and taking into account the financial position of the Group, the Group has decided to make a partial payment of the bail in the amount of UAH 50 million (approximately US$1.3million). Under Ukrainian law, there is no legal obligation to pay the remainder of the bail amount. The partial payment of the bail amount is a smaller related party transaction for the purposes of Listing Rule 11.1.10R. This announcement is therefore made in accordance with Listing Rule 11.1.10R(2)(c). As per the requirements of Listing Rule 11.1.10R the Company has obtained written confirmation from an FCA-approved sponsor firm that the terms of the transaction are fair and reasonable as far as the shareholders of the Company are concerned.
The operations of Ferrexpo are unaffected. Further announcements will be made as appropriate. This announcement contains inside information. The person responsible for the release of this announcement is Mark Gregory, Group Company Secretary.