Last checked at 29 Oct 2008 09:32
29 October 2008
Strategy and Management Changes
Ferrexpo plc ("Ferrexpo" or the "Group") announces that the Board of Directors has revised the Group's expansion strategy in light of the recent changes in market circumstances.
The Board has concluded that along with the rest of the industry, the Group is likely to face a more challenging market environment in the coming months. As a result, the Board has resolved to hold all strategic initiatives in abeyance in the medium term and refocus the Group's activities on ensuring the continuing strength of its existing operations in Ukraine. Whilst good progress has been made with a number of potential partners in the Strategic Investor programme, the Board has decided that no further decisions will be made until stability returns to global commodity markets. These decisions have been made to enable the Group to avoid incurring significant capital expenditure at a time of market uncertainty and to ensure the continued ability of the Group to maximise value for its shareholders.
As a result of this change in the strategic direction of the Group, Mike Oppenheimer, the Chief Executive Officer, and Dennis McShane, the Executive Director - Business Development, have informed the Board that they believe their roles to have changed from the form envisaged previously, and have tendered their resignations. The Board has accepted their resignations, and both will step down from the Board with immediate effect, and leave the Group following an orderly handover period.
The Board has appointed Kostyantin Zhevago, a connected person of Fevamotinico S.a.r.l., the Group's majority shareholder, as Chief Executive Officer of the Group. As CEO of the Group, Mr. Zhevago will focus on managing the business through the current potentially significant deterioration in the world economic situation as well as on strict cash conservation. Mr. Zhevago will be advised by the existing Financial Risk Management Committee ("FRMC"), which will continue to operate and be chaired by Chris Mawe, the Group's Chief Financial Officer. The FRMC will report to the Committee of Independent Directors.
It is proposed that the Board be strengthened further by the appointment in due course of two more non-executive Directors, as a consequence of the acquisition of 25% of the Group's issued share capital by RPG Industries SE. The Board has proposed that Miklos Salamon, the executive Chairman of New World Resources NV ("NWR"), and Marek Jelinek, the Chief Financial Officer of NWR, be appointed as non-executive Directors of Ferrexpo. Mr Salamon was previously an executive director of BHP Billiton, and the Board believes that he will be of great assistance to Mr Zhevago in advising on the operations of the Group. Mr Jelinek will advise the Committee of Independent Directors on the financial aspects of the matters before it.
Michael Abrahams, Ferrexpo Chairman, said:
"The Board is deeply grateful to Mike Oppenheimer and Dennis McShane for their outstanding contribution to the Group over the past few years. Mike and Dennis shepherded the Group through its pre-IPO turnaround, the listing process and its first year as a listed company, and none of the Group's recent successes would have been possible without their outstanding efforts. We wish them well in their future endeavours.
We welcome the appointment of Kostyantin Zhevago as Chief Executive Officer. The Board believes that Kostyantin is best placed to lead the Group during the challenging time ahead as a result of his knowledge of the Group's Ukrainian operations and his successes in conducting business in Ukraine and the CIS countries. He will be assisted in his new role by the Financial Risk Management Committee and the Committee of Independent Directors. The latter will be advised by one of our very capable proposed new non-executive directors and both committees will provide invaluable advice and support to our new CEO, as will Mike Salamon, who has an outstanding record of value creation in the mining industry.
Ferrexpo is a resilient business with enormous iron ore resources and an established track record of increasing production and managing costs. With our good customer relationships and low debt, we are well placed to generate shareholder returns in the challenging environment that we see ahead."
For further information, please contact:
Ferrexpo: +44 207 389 8304
Gavin Mackay
Finsbury: +44 207 251 3801
Robin Walker
Alex Simmons
Notes to Editors:
Ferrexpo is a Swiss headquartered resources Group with assets in Ukraine, principally involved in the production and export of iron ore pellets, used in producing steel. Current output is over 9 million tonnes per annum, approximately 85% of which is exported to steelmakers around the world, and the Group is currently undertaking a significant growth programme. The Group is listed on the main market of the London Stock Exchange under the ticker FXPO. For further information please visit www.ferrexpo.com.