Sirius Mine Funded

Captain Black's picture

The Launch : "The Stage 2 Financing consists of a combination of:

(i)    an underwritten Firm Placing and Placing and Open Offer to raise gross proceeds of approximately US$400 million 310 million) at a price between 15 and 18 pence per New Ordinary Share (the "Issue Price") launching immediately following the release of this announcement;

(ii)   an offering of guaranteed convertible bonds with an aggregate principal amount of approximately US$644 million (the "New Convertible Bond Offering") launching in conjunction with the Firm Placing and Placing and Open Offer, of which up to US$244 million is expected to be applied by the Company entirely in purchasing an equivalent amount of the Company's existing 8.5 per cent. guaranteed convertible bonds due 2023 (the "Existing Convertible Bonds") through the Existing Convertible Bonds Buy-back (as defined below), (the detailed terms of which will be announced separately on the date of this announcement) such that approximately US$400 million of the New Convertible Bond Offering is fully underwritten at launch;

(iii) senior secured guaranteed bonds in a gross amount of US$500 million (the "Initial Bonds"); and

(iv)  a committed and secured revolving credit facility with a maximum commitment of US$2.5 billion, which will reduce as further senior secured guaranteed bonds are issued after the Initial Bonds (the "RCF", and together with the Initial Bonds the "Stage 2 Debt"),  (together, the "Stage 2 Financing")

 Chris Fraser, Managing Director and Chief Executive Officer of the Company, said:

"In March we paused discussions with prospective lenders to work on an alternative financing proposal with J.P. Morgan Cazenove.

Today we are pleased to announce that, as a result of that work, we are launching a comprehensive markets-led solution for our funding requirements which will enable Sirius Minerals to complete the development of its mine and unlock what we believe to be the world's largest known high-grade polyhalite deposit.

The funding package will bring together equity, convertible bonds, high yield debt, and a US$2.5bn revolving credit facility in a multi-stage, flexible structure that balances the availability of capital with the needs of the project.

Today's announcement provides a clear pathway to a fully financed project in the months ahead, while enabling us to progress construction at full speed."

The Bond Offering:  "Convertible Bond Offering and Concurrent Repurchase of any and all Outstanding U.S.$244.2 million Guaranteed Convertible Bonds due 2023

Sirius Minerals Plc (the "Company") today announces the launch of an offering (the "Offering") of U.S.$400 million of Guaranteed Convertible Bonds due 2027 (the "Bonds"). The Bonds will be issued by Sirius Minerals Finance No.2 Limited (the "Issuer"), a wholly-owned indirect subsidiary of the Company incorporated in Jersey, and will be guaranteed by the Company. Concurrently with the issue of the Bonds, the Issuer also intends to issue up to U.S.$244.2 million in aggregate principal amount of Guaranteed Convertible Bonds due 2027 (the "Non-Escrow Bonds") to holders of the outstanding U.S.$244.2 million of Guaranteed Convertible Bonds due 2023 (ISIN: XS1515223516) (the "Existing Bonds") issued by Sirius Minerals Finance Limited and guaranteed by the Company who tender their Existing Bonds for repurchase pursuant to the Repurchase (as described herein). .."

"The Bonds will have a principal amount of U.S.$200,000. The Bonds will be issued at par and will carry a cash coupon of 5.0% per annum payable quarterly in arrear in equal instalments and will be redeemed at maturity on 23 May 2027 at 160.19%, implying a yield to maturity of 10.0%. "

"The final terms of the Bonds are expected to be announced on 1 May 2019, subject to acceleration. Settlement and delivery of the Bonds and any Non-Escrow Bonds is expected to take place on or about 23 May 2019 "


Let the 'carnival' begin

In short they are fully funded subject to exchanging old bonds for the new bonds and new issue

Ah, So :-)

via J P Morgan 'Cazenova' and lots of rum ...

@ 10billion shares NPV  £15bil  I still get 45p or £4.50 at full potential production ...

Anyhooos about that dust ;-)

Spose they've got that freedom book shelved ...

Anchors Away  ;-)




Captain Black's picture

The Back Foot

"  Sirius Minerals, the company building a $5.2bn fertiliser mine in North Yorkshire, expects to achieve a single B credit rating for the high-yield bond vital to its funding plan for the highly ambitious project. The London-listed miner needs to raise $500m in the debt market by end of September so that it can access a $2.5bn corporate overdraft facility being provided by JPMorgan and complete development of the mine, one of the biggest civil engineering projects in the UK.

First production at the Woodsmith mine is expected in 2021, with output increasing to 10m tonnes by 2024. The company’s supporters say it will be one of the most profitable fertiliser producers in the world when the mine is up and running.

Sirius chief executive Chris Fraser said the company had spent a lot of time over the past six weeks talking to high yield funds and expected to get the bond issue “done”. “We have also been through a private rating process for the bond . . . we are very confident that we will be able to get a single B rating,” Mr Fraser told the Financial Times.

He was speaking after Sirius completed the first stage of its $3.8bn funding plan, raising $425m through the sale of new shares at 15p — the bottom end of an indicative range — and a further $400m by selling eight-year convertible bonds. “The size of the equity portion was larger than we expected, and comes at a big discount, but does de-risk the project in the long run,” said analyst at Berenberg.

The $825m cash call effectively closes the first phase of the company’s ambitious funding plan for the Woodsmith mine, which is situated near Whitby on England’s northeastern coast. The project involves sinking two 1,500m shafts below a national park to access a 70m thick seam of polyhalite, a natural fertiliser. Sirius will then move the ore to a port on Teesside via a nearby 40km underground tunnel. It is the deepest mine to be sunk in the UK since the 1970s and alongside Crossrail is one of the country’s biggest construction projects.

Shares in Sirius fell 10 per cent to 15.81p, extending losses this week to almost 30 per cent. The company is currently valued at around £800m.

Mr Fraser said he expected most of the project finance banks that had been in discussions with Sirius earlier this year to back its new financing plan. “We have had a lot of expressions of interest already,” he said. Mr Fraser explained that JPMorgan would not have offered a $2.5bn revolving credit facility unless it believed it could be syndicated to other investors. “They [JPMorgan} wouldn’t . . . say OK we will take on all the risk . . . big banks aren’t run like that.”

The involvement of JPMorgan in the financing plan is a big vote of confidence for the project and will help silence some of its critics who said the company would never be able to finance the mine or find buyers for its organic fertiliser, which will be sold under the name Poly4. “I don’t really care about people who criticise and who say we can’t get this done because I know we can. It’s just a question of how,” said Mr Fraser. “We will get this bond done. We will deliver this project and maybe then I will allow myself a moment to look back and reflect – until that time it is all about moving forward. “Only once this thing is a $20bn FTSE 100 company will the sceptics be satisfied . . . and even then I’m sure they will find some reason not to invest in the company,” he added."

Pssst .. at full potential it is $45bil at the discounted Poly4 rate producing 30mtpa.

Dig Dig ...

Something to chew on :