RE: Foreign Aid23 Sep 2019 09:43
Hi all
Below is the text of an email I sent to Investor Relations on Saturday. After reading in today's press about £1b of foreign aid being diverted to a clean energy fund, my idea doesn't sound too crazy.
Good morning
I have been invested in Sirius for 6 months and hold 700k shares at an average of 15p, so are currently heavily under water. Having given the current situation a lot of thought, I still believe in this company and everything the BOD is doing, and have decided to hold onto my shares for now, but would like to offer a thought on financing as below.
This is probably lateral thinking gone mad, but has any thought been given to approaching the government office for foreign aid to place an order, and pay up front, for £250m worth of POLY4.
It is well know that the government has a legally binding budget to spend 0.7% of GDP on foreign aid, which this tax year amounts to £14b, and they always struggle to find legitimate projects to spend this money on.
We could offer to help them out by selling them £250m of POLY4 which they could distribute to developing countries as part of any foreign aid package. At the agreed rate of £115 per ton, this would equate to 2.174mt however, to give them an incentive to buy and pay up front, we could offer them 2.6mt for £250m equating to £96 per ton and with a value of £3m giving them a benefit equivalent to a 10% interest over 2 years.
As the government would be purchasing goods to be distributed I would not expect this to fall foul of the EU state aid rules. Equally, as this money has already been allocated to the taxpayer funded foreign aid budget, there is no additional risk to the UK taxpayer.
From a shareholder point of view, this would provide the immediate funds required without involving a strategic partner and without any further dilution. There would be a one off hit to shareholders in the year that the 2.6mt was delivered as the annual profit for that year would be reduced by 2.6mt@ £19 per ton = £50m. The effect of this on the 7b shareholders would be to reduce the dividend payment, for that year only, by 0.7p per share.
I hope you find the above of interest.
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