FERREXPO PLC 
By LONDON (Reuters) - The two largest investors in London-listed Ferrexpo (>> Ferrexpo Plc) will trim their stakes to help boost the portion of its shares that can be freely traded, as the foreign-controlled resources firm strives to meet London's new rules.
Investors - some burnt by troubles at mining companies controlled by majority investors, such as Kazakh miner ENRC - have pressed UK regulators and stock market index providers like FTSE for tougher rules, and an increase to required freefloats.
FTSE Group announced changes to its rules in late 2011, demanding a 25 percent freefloat to protect minority investors and stop companies with poor corporate governance from securing a spot on London's prestigious stock market.
But it gave existing companies until 2014 to make changes. Companies including Mexican silver miner Fresnillo (>> Fresnillo Plc) have already complied - placing shares in April - while ENRC, for example, has been taken private.
Ferrexpo is the last of the major resources firms to move towards meeting the new rules.
It said in a statement on Wednesday that chief executive Kostyantin Zhevago, who is also the top shareholder in the Ukraine-focused FTSE 250 miner, would trim his stake. Private investment company BXR Group would do the same.
Ferrexpo did not say when the share sales - a combined holding of nearly 2 percent in the group - would take place.
Ferrexpo shares were down 1.5 percent in morning trade, with analysts saying the move was positive, even if news of the share sale would hit the stock price in the short term.
Britain's financial regulator, the Financial Conduct Authority, has its own plans to introduce new measures to boost corporate governance, including a requirement for companies in which one shareholder owns more than 30 percent to have a "relationship agreement" in place. It hopes that will help companies operate independently.
Ferrexpo's Zhevago, a Ukrainian billionaire and parliamentarian, will sell approximately 4.1 million shares held by holding company Fevamotinico, which he controls - equivalent to a 0.7 percent stake in Ferrexpo. This will reduce Zhevago's majority holding to 50.3 percent and increase the freefloat to 24 percent.
BXR Group will then trim its stake - currently 25 percent, according to Thomson Reuters data - to help Ferrexpo reach the required 25 percent freefloat target by March 4.
"Though news of share selling may impact the price in the short term, we view this announcement as positive, as it should remove any doubts the market may have had over Ferrexpo's position in the FTSE 250 Index next year," analysts at Cantor Fitzgerald said in a note to clients.
(Editing by Clara Ferreira-Marques and Catherine Evans)
By Stephen Eisenhammer
