(Alliance News) - Sirius Minerals PLC said Friday that a proposal with financial investors running as an alternative to the group's takeover by Anglo American PLC, has been deemed unviable, and discussions over the proposal have ended.
On Friday last week, Sirius said it had explored a potential debt financing from a consortium of investors, which would lead to the raising of a USD680 million funding package to cover the initial scope of work for the North Yorkshire polyphalite project.
The initial package would have been a precursor to needed to raise a further USD2.5 billion in capital to reach a production capacity of 10 million tonnes per annum.
Conditions for the alternative proposal to go ahead included Sirius undertaking an equity raising, the achievement of concessions from creditors, approval from local authorities and the completion of due diligence.
However, Sirius has been unable to secure an anchor investor willing to provide the majority of equity required, and as a result the proposal has been deemed non-viable.
Sirius has now recommended that shareholders accept the GBP404.9 million offer from Anglo American PLC at the upcoming meeting, otherwise there is a high probability that the company will go into administration or liquidation.
Shares in Sirius Minerals were down 4.2% at 5.18 pence on Friday in London. Anglo American's London shares were down 0.3% at 2,126.50p, while its Johannesburg shares were 0.5% lower at ZAR411.32.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Anglo American (AAL)