To find £411m / $500m, I make it that each shareholder would need to loan Sirius 60% of their current share value.
Maybe the bonds being pulled was a sign of confidence by CF and the board. Maybe they knew they had enough interest, only they couldn’t get the terms they believed they would get if they waited. Maybe they felt they could get 12% and not the 13.5% offered at the time. If you know you can sell the bonds in the window you have, why sell them when the market is down. Be patient, wait and sell when the market is back up again. Somebody desperate, believing it was their only option, may have sold at 13.5%.
I sold out 100% at just over 8. Now back in, having lost 10% of my holding in the process. Just a note of caution really to anyone who gets the jitters and thinks about exiting. Having sold out, crystallising my loss, my hope of gaining my investment back was gone. Ultimately I decided I’d rather be in the game than not.
I do think the bonds will get away, I think the odds are in our favour. Holding 122.6m shares, CF’s interests will be largely aligned with ours. CF’s share value will have taken a national lottery win sized hit last week. Is he bothered? Probably not, he has no intention of selling. Instead he will be focused on getting the best possible deal on the bonds, to maximise his and our long term value. I expect the negotiations to be go down to the last few weeks, as they often do, with CF pushing his hardest.
Well I’ve been spooked out today and sold at a 47% loss. A LTH not wanting to lose any more life savings. Could afford to lose it, but still could not stomach it any more. I’m sure the mine will get built, but who will profit the most I don’t know. The way the market is being played by a few seems wrong. Fund managers are taking from small pension pots. I hope they feel good about themselves. I will now try and forget about this one and move on!
Good advice there... I should take it! I’m only invested in Sirius. Doubled my holding on Monday in anticipation of the bonds coming through. If only I had waited 24hrs! Lost £15.5k this week. To keep the faith or not? To be honest, and I had the chance on Tuesday, I’d probably now happily take a £7k loss here and walk away. It felt too early then (at around 11.80p).
But I’d like to think CF knows exactly what he is doing, and that he is working his hardest in the interests of all shareholders to get the best deal. IF the bonds come through, we’re back on track.
My gut says this is now a gamble, and I have no idea what the odds are one way or another. I’m not a gambler normally. Although I can afford to lose it, I’d rather not! This is an uncomfortable ride, but if I had to bet my house one way or the other, I’d put it on PI’s achieving a satisfactory result in the end.
FT:
A person close to the deal said that they wanted to issue in the best possible conditions, as Sirius needs to issue a further $2.5bn of bonds to refinance its credit facility and cannot afford to create ill-will with high-yield investors. They added that they had been confident of closing the transaction, before escalating trade war fears knocked bonds from metals and mining peers in the US.
“We wouldn’t have launched the deal and put out [guidance on the yield] if we didn’t think we had a viable path to execution,” they said.
Health is wealth! Couldn’t agree more - many people in the world are suffering today way more than we are.
Sirius is not out of cash yet and won’t be out by end of Sep - only the JPM credit facility offer expires then, if a further US$500m is not raised. Leaving a 7 or 8 week window to finance one way or the another. Plenty of us modelled and invested at 15p per share a short while ago. What has really changed, aside “market conditions”? The net present value still looks way over 15p and work on the mine is going well. Fully financing the mine was always the risk and a risk we all signed up to. Were we stupid to invest? Markets are generally quite good at attributing the right value to a share. Generally we will have bought it at values that were appropriate at the time we bought in. Fully financing the mine this quarter is still possible, albeit it is looking a harder to achieve today than it looked before.
I’m holding. To me it doesn’t make sense to sell out the day of a share price crash. I’m going to let the dust settle and see where we are in a few days time.