Ferrexpo tumbles as transactional bank goes bankrupt

18th Sep 2015 08:42

(ShareCast News) - Shares in Ferrexpo tumbled on Friday after the iron ore producer with assets in Ukraine said its transactional bank in that country has been declared insolvent.Ferrexpo said Bank F&C had been declared insolvent by its largest shareholder, Kostyantin Zhevago."The board of Ferrexpo is assessing the situation and will update the market as necessary."The company said its operations are not currently affected. Ferrexpo said it has around $174m of its total $280.0 million cash balance at Bank F&C.Investec said: "While Ferrexpo had highlighted the potential risk in its recent accounts, given the progressive recapitalisation efforts by F&C, this has still come as a surprise to us. The company has $106m held offshore, so operations can continue while Ferrexpo seeks extensions from existing and other banks, but it is clearly not an ideal situation."At 0908 BST, Ferrexpo shares were down 25.5% at 43.96p.