Ferrexpo PLC on Monday said it has taken steps to settle debt a company claims its Ukraine subsidiary owes.

Ferrexpo is a Baar, Switzerland-based iron ore pellet producer with operations in Ukraine.

Shares in Ferrexpo fell 7.3% to 65.05 pence each in London on Monday morning.

The company said Kysen, a supplier a supplier to its subsidiary Ferrexpo Poltava Mining, is seeking creditor protection proceedings against the company.

The amount of debt claimed by Kysen is UAH2.2 million, or $58,000, Ferrexpo said. Court proceedings are scheduled to start this week.

‘Given restrictions with the operation of FPM’s bank accounts in Ukraine, and the nature of the payment that is being made to settle the debt, FPM is not able to provide assurance now that funds will be received in a timely manner and for that reason FPM is, in parallel, also seeking to agree an extension of payment terms,’ Ferrexpo noted.

The company added that it is ‘working closely with its legal counsel and other advisers to consider and address the situation’, adding that its operations remain unaffected.

This comes after Ferrexpo reported last months that would withdraw a proposed interim dividend due to unexpected events in Ukraine.

The company said it would not proceed with the proposed interim dividend of 3.3 US cents it had proposed in January due to the claim against FPM.

Back then, Ferrexpo said that a Ukrainian court of appeal confirmed a $125 million claim against the company over loan agreements.

FPM back in January had announced it would file an appeal to the Supreme Court in Ukraine, with Ferrexpo saying the local subsidiary has ‘compelling arguments to defend its position’.

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