Two execs at Ferrexpo quit after sales take sudden dive

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Ukrainian MP and oligarch Konstantin Zhevago, who owns 51% of the company, is coming in as chief executive. Ferrexpo shares crashed to a new low on news of the shake-up.

The iron-ore producer said several of its export customers had shifted fourth-quarter orders into next year as iron and steel demand from the car and other engineering industries dwindled.

Ferrexpo, which floated at 140p in June 2007, said it was putting all its expansion plans on hold as it faced "a more challenging market environment in the coming months".

As a result, chief executive Mike Oppenheimer, a former BHP Billiton executive, and development director Dennis McShane, a former JPMorgan investment banker, have resigned. They were paid $9.9 million and $9.3 million respectively last year but this included large flotation bonuses, and their pay-offs are likely to be closer to $3 million and $1 million.

Zhevago was forced to sell a 21% stake in Ferrexpo to a Czech mining company earlier this month after JPMorgan made a margin call on loans worth millions of dollars he had raised for his other business interests.

Zhevago sold at just 83p a share. As recently as June, Ferrexpo shares hit a peak of 455p. Today they slumped 10½p to a new low of 42½p.

Analysts said they believed Zhevago would concentrate on running the company to create cash for as long as the Ukrainian economy remained in meltdown. The country is finalising a $16.5 billion loan from the International Monetary Fund.