Sirius Minerals reassures investors after share value drops

Sirius Minerals has sought to reassure investors as shares in the company fell in value after the company postponed a bond issue.

By Corinne Macdonald
Tuesday, 13th August 2019, 10:48 am
The mine site. PIC: Gary Longbottom
The mine site. PIC: Gary Longbottom

The $500m bond issue is part of the company's Stage 2 Financing announced earlier this year.

The company, which has its headquarters in Scarborough, is constructing a mine near Sneaton, Whitby, to extract polyhalite, a naturally occurring mineral which will be used in fertiliser.

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The project involves the construction of the mine and a tunnel system to transport the polyhalite to a materials handling facility and harbour at Teesside.

A spokesman for the company explained that the trade war ramping up between the US and China had caused a negative impact on the market, prompting Sirius to postpone the bond issue.

He said: "It's not a cancellation, construction is still going ahead, and we plan to reissue [the bonds] by the end of September."

In April, Sirius announced it would fund a portion of a $3.8 billion financing package itself in order to unlock a $2.5 billion revolving credit facility offered by US investment bank JP Morgan.

Sirius has completed the first part of the process through the sale of $800 million of new shares and bonds in the first half of the year but also agreed to a $500 million bond issue before the end of September.

After announcing the bond issue in July, the company last week issued a statement saying it had decided to "suspend the proposed offer" due to "current market conditions".

Following the statement, Sirius' share value fell dramatically.

Barring delays, the first production of polyhalite is due to start at the mine in 2021.