LONDON (Alliance News) - Sirius Minerals PLC on Tuesday announced a major new financing package worth USD3.8 billion for the development of the Woodsmith mine in Yorkshire.
Shares were 18% lower on Tuesday morning at a price of 18.05 pence each, the worst performer in the FTSE 250.
The financing represents part two of the financing plan for the polyhalite mine, which will supply fertiliser once up and running, and is made up of four parts.
The first is a firm placing, a placing, and open offer worth USD400 million, with shares to be placed at between 15 pence and 18p per share, launching immediately.
Secondly, Sirius will offer convertible bonds worth USD644 million, of which USD244 million will be used to buy back existing bonds.
Next, it will offer USD500 million of senior secured guaranteed bonds, and has also secured a revolving credit facility of up to USD2.5 billion, which will reduce as the bonds are issued.
Managing Director & Chief Executive Chris Fraser said: "In March we paused discussions with prospective lenders to work on an alternative financing proposal with JPMorgan Cazenove.
"Today we are pleased to announce, 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 USD2.5 billion revolving credit facility in a multi-stage, flexible structure that balances the availability of capital with the needs of the project," Fraser added.
Sirius, which signed a fertiliser distribution deal with Germany's BayWa AG last week for Woodsmith polyhalite, said in mid-March it had received an approach from a "major global financial institution" over financing for the mine.
Sirius also released 2018 financial results on Tuesday, showing a pretax loss of GBP13.5 million from GBP79.3 million a year prior, due to a significant swing to net finance income from a loss.
No revenue was booked as Sirius does not yet produce.
"2018 was a year of significant construction progress and material expansion in the company's global distribution footprint for POLY4 through its growing number of binding take-or-pay supply agreements," said Sirius.
"2019 is a critical year for the company as we work towards securing the financing of our project through to the extraction of first polyhalite from the Woodsmith Mine by end 2021, and delivering transformative economic benefits to the region and the UK."