Ukraine’s Economic Court of Poltava Oblast has opened bankruptcy proceedings against the Poltava Mining and Processing Plant (PGZK), triggering a sharp market reaction and renewed investor concerns surrounding iron ore producer Ferrexpo.
The company confirmed the development in a statement to the London Stock Exchange on February 24, noting that the court initiated proceedings before a final ruling had been issued by Ukraine’s Supreme Court. Following the announcement, Ferrexpo’s share price fell by 28 percent.
The bankruptcy case was initiated by Maxi Capital Group, which secured a court judgment in January 2025 ordering PGZK to repay UAH 4.7 billion. The dispute stems from a financial claim originally linked to the failed Finance and Credit bank, where PGZK acted as a guarantor. Maxi Capital acquired the claim in 2020.
PGZK maintains that the debt had already been settled, citing the write-off of funds in August 2015 and their subsequent return to company accounts in July 2019, arguments reflected in earlier court rulings. The matter remains under consideration by the Supreme Court, despite bankruptcy proceedings now formally underway.
Operations at the mining and processing plant continue uninterrupted, but the legal escalation has increased uncertainty for investors and lenders. PGZK is one of Ukraine’s largest exporters of iron ore pellets to European markets, meaning prolonged litigation could affect financing conditions, payment stability and regional export flows.
Ferrexpo stated that PGZK intends to appeal the court’s decision within the statutory ten-day period. However, under Ukrainian law, filing an appeal does not suspend bankruptcy procedures, leaving the timeline and potential consequences difficult to predict.
The case also adds to broader scrutiny surrounding Ferrexpo and its controlling shareholder, businessman Kostyantyn Zhevago. Earlier in 2025, bankruptcy proceedings were opened against pharmaceutical group Arterium, also associated with Zhevago, while PGZK’s board leadership has faced investigations by law enforcement authorities since 2023.
Market analysts note that even without operational disruption, reputational risks and declining market capitalisation could complicate access to investment capital. The outcome of ongoing appeals and Supreme Court decisions will likely determine whether the dispute remains a legal challenge or evolves into a broader economic risk affecting employment, exports and investor confidence.
