Member Info for Cranleigh

($6.5bn at 31 Dec 18)....

Check what you’ve got in your petty cash box!

Not only that low default rate, but first-ranking security alongside whatever the JPM borrowings might be...and an apparently high expected coupon. No more shares or Convertibles, please!!

If Peppa f......g Pig is worth $4bn, SXX must be worth.....

And Gina’s $50m

No, there's a market in "second-hand" CBs. Not easy for us amateurs to find price quotes, though!

I think SXX do stick to one name for them - "Convertible".

The TR-1 is filed by the shareholder, in this case Citi, who choose their own text, dates and numbers...

There is nothing hybrid here - the Bonds are convertible into SXX shares by means of a financial soft-shoe shuffle that occurs when a bondholder notifies the issuer that he wishes to convert his bond...in the first instance, he gets a preference share in Sirius Minerals Finance No.2, then this is automatically converted into shares in SXX:

"Subject to and as provided in the terms and conditions of the Bonds, each Bond shall entitle the holder to convert each U.S.$200,000 principal amount of a Bond into one fully paid Preference Share, with each such Preference Share being issued and allotted at a price equal to the Paid-Up Value. All Preference Shares issued on conversion of the Bonds shall (without any further action being required to be taken by the relevant Bondholder) automatically be transferred on and as at the relevant Conversion Date from the relevant Bondholder to the Guarantor and in consideration therefor the Guarantor shall either issue or transfer and deliver to the relevant Bondholder such number of Ordinary Shares as is determined in good faith by the calculation agent by dividing the aggregate Paid-Up Value in respect of such Preference Shares by the Exchange Price in effect on the relevant Conversion Date (and, where necessary, rounding down to the nearest whole number of Ordinary Shares)." CB Prospectus, p.11.

And BTW the term "exchangeable" is technically correct, because the bonds can be converted into the shares of an entity (SXX) other than the issuer (Finance N.2).

The new 2027 exchangeable bonds are issued by Sirius Minerals Finance No.2 Ltd (a Jersey-registered subsidiary of SXX) and convertible into SXX shares. Their redemption date is 23 May 2027.

I think the 13 May 2027 is a typo by Citi.

If you work back from the number of shares through the conversion price to a number of bonds, both lines give an exact number of new, 23 May 2027 CBs:

185,018,420 at $0.2443 = $45.2m = 226 new CBs
40,933,279 at $0.2443 = $10m = 50 new CBs.

So to me, Citi are holding 276 new CBs, 13.8% of the new issue.

I agree with you, smalltimeii - ability to pay the coupon and principal....plus the security offered (a part-finished mine with demonstrated demand for its (almost) unique, disruptive product capable of delivering very high margins for 100+ years in a growth market)

What a coincidence the name of that barge opposite, Myo!

Lose some money, ffc, but their stage 2 CBs are in escrow pending completion of the $500m bond sale, so that $50m investment (249 CBs) is safe.

Myo, I think you will find Convertible bond and Exchangeable bond are effectively the same thing. Strictly, “Exchangeable” is used when the issuer is not the same company as the company into whose shares an exchange is possible. In this case, the bond issuer is Sirius Minerals Finance No. 2 Ltd, whereas it is convertible into shares of Sirius Minerals Plc. So that stacks up. And redeemable on 23 May 2027, the date mentioned alongside the 175m shares. What the 13 May 2027 date alongside the other Exchangeable bond in the RNS refers to I don’t know.....perhaps an error.

When we checked in to our hotel in France today and found our room is named Myosotis, I took it as an omen that all will be well. As reliable as any other basis in a Trump-influenced world!

“money raised in share sale could be generally cheaper than debt for a company”

Can’t agree with that, wwguk. Equity should always be the most expensive form of finance, as it carries the highest risk. And it is owned by ambitious or greedy (you choose) shareholders like us on this board.

LITC, so far as I am aware, they are all unleveraged NPVs. So effectively these NPVs correspond to Enterprise Value (market value of equity plus net debt), not just to market value of equity. All down the road, for the moment!

The other issue to me is, if your discount factor has already - as it should - been chosen to incorporate an allowance for risk, why are the likes of Liberum then discounting a second time to allow for risk?!

And good morning to you too, PAAA.

From a commercial strategy viewpoint, I’m happy with what we have - ADM and Wilmer, an associate of theirs, on board for several years and strongly motivated (to judge from their PR since their cloak of anonymity went), plus a good smattering of smaller, hungry players in other territories to whom success with distributing Poly4 could be transformative, and who are certainly not in hock to any existing fertiliser companies.

All should be strongly motivated to make the best of the opportunity, and we should have a good “share of mind”, especially where we are in JV type arrangements with the possibility of sharing in value further down the value chain (eg Brazil etc, Europe...). #beyondwoodsmith

Small coal (or beer?!) indeed, Scotman.

I am surprised that Liberum, in their breakdown of an 80% discount to their NPV, only ascribe 30% weighting to financing risk. It feels way bigger to me, while we are sat at 15p and we could run out of cash in a few months.

On the other hand, given the extensive crop trial results and TorP volumes, plus potential for higher pricing than currently assumed, market risk at 30% seems high.

If you run the numbers instead at say 50% finance risk, 30% execution (build) risk and 20% market risk, the upside potential for the SP if/when these $500m bonds are sold becomes a very attractive prospect for those willing to wait more than 5 minutes.

And that’s assuming that we only meet the official target build timetable.

There has to be a first time

“Avery few weeks”

Looks like you are right, LL, if the ?Proactive Investor press report is to be believed - a 3-week roadshow by JPM and SXX to sell the bonds.

And, contrary to my reading of the RNS small print, there IS a Prospectus (albeit in the form of a “Confidential Information Memorandum”).

As the bishop said to the actress, “I think it’s time for me to withdraw”.