Sirius Minerals receives major new loan proposal

(Sharecast News) - Sirius Minerals says has received a conditional proposal from a major global financial institution in respect of the £3.5bn "stage 2" financing that would potentially fund its Yorkshire polyhalite mine through to production.The FTSE 250 company said the new financing proposal could completely replace the three-tranche concept for raising US$3.0bn of senior debt that it had outlined in January.Sirius said the new proposal "potentially offers a more flexible and attractive solution" to its financing requirements and believes dealing with a single party will increase the likelihood of finalising the debt package by the end of April.Cash balances stood at £290m at the end of December, which the company said was sufficient to progress the project in line with the current schedule into the second quarter of 2019.Sirius said it was "pausing discussions" with existing prospective lenders, which had included the government's Infrastructure and Projects Authority, to pursue talks on the new proposal, though "a number of options" continue to be progressed for the additional £0.4-0.6bn of non-senior debt financing requirement.Broker Liberum said: "We think this gives some clarity around the delays in debt financing from a top-down view looks a simpler solution with only one party to deal with."House broker Shore Capital said: "All things considered, while Sirius is currently at development stage and still some years from becoming a cash flow-generating company, we believe that an investment in Sirius should become progressively de-risked and enjoy significant value uplift as it advances towards production."