Ferrexpo PLC (LSE:FXPO) secured a $15 million unsecured loan facility from its largest shareholder, Fevamotinico, to provide immediate liquidity ahead of a proposed $100 million equity raise.
The iron ore producer's shares were up 6% at 30.98p on Tuesday, compared with a previous close of 29.20p.
Fevamotinico is entitled to exercise, or control the exercise of, 49.27% of the votes able to be cast at Ferrexpo general meetings.
The 9.75% subordinated facility is designed to support working-capital requirements and production operations that restarted on 7 September.
The loan represents a pre-payment for part of Fevamotinico’s $40 million subscription, offsetting its equity commitment if the placing succeeds.
If the fundraising does not complete and the placing agreement terminates, the loan principal and accrued interest will fall due for cash repayment on the maturity date. The maturity date is 12 months after the loan date.
In those circumstances, the company may elect to issue new ordinary shares, subject to legal and regulatory conditions, including prior approval from independent shareholders.
Although the loan contains customary events of default, Fevamotinico agreed not to demand repayment, initiate insolvency processes, or recover cash before maturity.
While outstanding, the agreement restricts the group from incurring financial indebtedness or granting security, except for permitted exceptions such as the Potential Trade Finance Facility and intra-group arrangements.
Shareholders are due to vote on resolutions to approve the fundraising at a general meeting on 21 September 2026.
