Ukrainian tax authorities suspend VAT refunds for Ferrexpo

Ukraine-focused miner Ferrexpo said on Friday that the country’s tax authorities had suspended its value-added tax refund worth 512.9 million hryvnias ($12.36 million), warning that the decision would strain its liquidity.

“The suspension of VAT refunds will place significant stress on our business, at a time when we are already managing many other challenges,” said executive chair Lucio Genovese.

Ferrexpo, which posted a surprise annual loss on Wednesday, said this suspension could lead to further reduction in its production and sales, in an already low iron ore price and high cost environment.

The tax suspension, imposed on two of Ferrexpo’s units, is related to the imposition of personal sanctions on Ukrainian billionaire Kostiantyn Zhevago, the company said, adding that the sanctions have not been imposed directly on the company or any of its units.

Zhevago, who controls the London-listed iron pellet producer, has been embroiled in alleged embezzlement lawsuits.

($1 = 41.4900 hryvnias)

(By Yamini Kalia; Editing by Rashmi Aich)