Member Info for wwguk

I gather Odey's intention is to push the AAL offer from 5.5p to 7p (1.5p difference), so they can earn 1.5p per share of their newly established holding. As they bought the shares at a price much lower than 5.5p on average, if the AAL deal got through, they will still have earns (say 0.5p to 1p difference per share).

Odey looks different from Polygon whose purchase price is very near to 5.5p and mostly in CFD, possibly AAL has had some kind of deal with AAL (for example, keeping the shares for AAL) and therefore would not have any loss to themselves.

I gather Polygon is more ken to have an improved AAL deal than serves as the lead II in the alternative proposal; however, if the voting result is No, and if AAL does not provide an improved offer, Polygon may be forced to take the lead of the alternative proposal. Their position may change; another possibility is that there is some secrete deal between AAL and Polygon.

As you said, another possibility is that
they have been working together: first Polygon to help AAL get as more Yes as possible, then if 5.5p offer fails in the vote, AAL will up their offer above the price Polygon paid, therefore, Polygon will not lose anything.

Alternatively, AAL agrees to up their offer, then Polygon may ort the improved AAL deal, and back down again from the alternative proposal.

I gather in case the voting result is No, to avoid the loss, Polygon will serve as the lead II investor in the alternative proposal to be submitted in between the voting date and the court date. This might be their hedge for the long bit.

casa: "If the vote is no they lose at worst £0.5 mill. It is a low cost, high return clever strategy(which is why i hold shares in their parent company)."

CFD is a financial derivative, referring to Contract for Difference. One may long or short in CFD.
Due to their financial power, Polygon may be offered a very high margin rate to buy the long CFD, for example, as you had £0.5m for the nearly 600m shares in their face value. If the share price offered by AAL raised to 7p, suppose their average per-share price is 5p; they will earn the difference, i.e., 2p per share and 0.02 x 600m = £12m

However, if the AAL deal fails and no other options or bid appearing, and the SM goes into administration and the share price drops to zero, the difference is now 5p (i.e., 5p -0p); as their CFD is a long position, they will only gain when the price goes up; however, when the price goes down, they have to pay for the difference 0.05 x 600m = £30m

Is this correct?

Lots of PIs were forced to have their shares sold due to the potential danger of administration; therefore I believe that the PI count has been greatly reduced (far less than 85000 as we heard a year ago). But the number of PIs are still much more than the number of IIs.

Yes, if the AAL deal fails and if there are no other options appearing, Polygon will have a big loss.

Polygon has never made its intention explicit.
Polygon might
- try to push a better offer from AAL, or
- expect an alternative offer/bit appearing, or
- involve in an alternative offer/bit appearing, or
- if there are no results from the first three, they will vote for (Yes) the AAL to safeguard their investment.

There are less than 50 IIs, and tens of thousands PIs. AAL should be able to get 75% by value (from all the voted shareholders, as many PIs may have not casted their votes).

The only chance of a No result would happen if there are more individual voters (especially PIs) voted NO (and if the No vote per client from PIs through brokers were counted as many votes coming from the clients, rather than treated as only one shareholder, i.e., the broker, whose Yes or No vote is based on which votes (Yes or No) are more than the other) as collected from the clients).

Thanks, casa for the info. When HL attend the meeting or vote for the client, I assume they will have a total number of shares or Yes vote and a total number of shares in No vote. These will add to the overall Yes or No shares by value.
Does HL be considered as one voter/attendant or many voters (i.e., the number of Yes clients and the number of No clients)?
If it is the latter, then the PI count in the meeting would be greatly reduced.

OR: "The SM business case was rather compelling. It remains just as compelling today."

I have been believing in the SM business case for a long time.
However, the problems encountered in fundraising over the past year have greatly reduced my confidence.

The issue of the quality of the TorPs seems to be a real issue, as the rating agency only recognized the ADM torp at the time; and the potential h.y.bond investors seemed also not positive on this. The gov also seemed not confident enough on the cash flow in 2021 or 2022 as promised in the SM original plan, as the gov considered it a great danger for the taxpayers' money (for the guarantee) even if to provide the guarantee at a later time when another $2b invested (which is much bigger than the $600m that SM claimed to be able to re-risk the project and support the following-up debt funding).
The CEO of AAL also mentioned that marketing is the main challenge, and this seems that in his mind this is more challenging than the risk of the deep shafts.
SM made an updated plan saying a $600m would derisk the deep shafts; however, it seems that they are not confident enough about this given the fact that they take preference of the full funding guarantee of the AAL deal than other short-term funding options around $600m. If $600m can dig the deep shafts from 45m to the bottom and help SM start to produce Poly4, the shaft constructor should have signed a fixed cost contract on the deep shafts with the additional $500m, rather than only with the tunnel constructor signed a less risky tunnel fixed cost contract. Clear, additional $500m was not enough to let DMC confident enough to reach the bottom of the deep shafts and therefore signing a fixed cost contract. This means that even if SM gets a short term bridging fund of $600m; the risk of the deep mines may still remain, and the following-up funding difficulty would still remain.

Although I am not happy with the AAL deal that would push all the shareholders out with only 1/3 of the price in the most recent open offer, and 1/4 of the stage one open offer, I am still glad that at least there is one big mining company interest in the project, which may indicate that the SM business case may not as compelling as SM/CF promoted, but still a somewhat compelling if an experienced and powerful mining company is willing to provide the full funding and take all the risks and challenges to complete the project.

Hopefully, AAL would finally agree to treat existing shareholders, especially the large number of PIs better by making some improvements on their offer before the voting (or after the voting, if there is still a chance to do so; which seems only possible in case a counter offer emerging after the voting; the chance seems low at the moment).

Longtermview24: ... $42m now, ..."... We're not done yet! But imagine what could've been achieved if the BoD hadn't ignored PI's and had asked us a few months ago. that makes me very very angry."

Yes, this makes us angry!

A few months ago, most PIs had not sold any of their shares and we would have adequate time to complete the process. They created the situation either by mismanagement or intentionally to force people to accept the takeover deal, just due to possibly inadequate time left for other options. After the failure of the bond raising, JPM in their report has envisaged equity or convertible bond raise; however, SM just sits inaction, not only without approaching shareholders to fund but also hide information on the Qatar attempt, consortium proposal, and the AAL offer intention. All this makes us angry!

Liam,
You can get the information you want from here, as I notice that you have already got many replies on this board.

The current situation was caused by either mismanagement or intentional design for making a junior mining project sellable to a big mining company (by making most of the shareholders' investment a good value for the big company):

* The $500m added cost to the tunnel is a strange decision, as the original tunnel had already been designed with the 20mtpa capacity and the design had been validated by external experts. If the main purpose is to have a fixed-cost contract for supporting the stage 2 fundraising, then the riskiest part of the project, i.e., the two over 1500m deep shaft, should also be changed into fixed-cost contracts. As without derisking the deep shafts with the fixed-cost contract, a fixed-cost contract of the less risky tunnel has not addressed the major concern of the investors. If the $500m had been used for a fixed-cost contract of the deep shafts rather then the tunnel, then the chance for Sirius Minerals to raise the 2nd stage funding would be much higher than now.

* Before getting the main part of the stage 2 funding arranged, the management has directed the project to spend the existing raised money at full speed until the failure of the bond raising; leaving no money and time for sorting out a needed $600m that could have the deep shafts derisked and keep the company running.

* This $600m could have been raised much easier if the management had planned or tried to raise it at a much earlier date when the company share price was still very high (e.g., as equity and loan provided by shareholders; something the recent consortium and the shareholder action group had been trying to do at a time when the management has the needed time run out without involving the shareholders or even informing shareholders that they have been working on a takeover deal behind scenes. If they had informed the shareholders of the consortium proposal and the specific difficulty encountered in early last December, the shareholders would have much time to help sort out the difficulties.

But now, the time is almost running out -- almost no time left for arranging other options. Is this the exact compelling situation (the stark choice) a junior mining project creator prepared or designed to make the takeover by a big company successful?

"Hold 40% of the Bonds."

Oasis bought both shares and some old CB.
Given that Qatar once owned over 70% old CB, it must have sold some of the old CB, otherwise
40% + 70% > 100%

KOH: "This needs to be advertised and go viral all over the country. Please use your contacts and send it to press, median, TV, friends, co-workers , wherever you can. If 100 people send 10 emails each that's 1000 emails. It will spread exponentially, make it loud. Let's make the whole country aware!" https://fundsirius.com/

He had suggested this months ago; if this would have been done earlier, it would provide the consortium great support. If half of the $600m can come from PIs, then the rest should be easily raised from the IIs, especially in the consortium. I have filled out the form with the number I am willing to take.

I mean that the following link in your 09:30 post
www.fundsirius.com

Is this an active one (or an old link)?
Is this related to the ShareSoc or people involved in the ShareSoc effort?

ffcmember, where did you find the link? Is this a new one (or still active)?

Bond Proposal:
We (Yashmin Ismail and her Investor Action Group) would be proposing to Sirius Minerals that they offer Bonds to both institutional and private investors.

We are in touch with Institutions, Shareholders, ShareSoc, Sirius Minerals, Anglo American and the Press.

www.fundsirius.com

Sirius Minerals Management thought and told ShareSoc that they believe fundraising at this stage would be difficult.
The survey may help provide SM a real estimate of how much they can get from IIs and PIs, i.e., if $600m needed for the Initiation Scope could be raised from investors (as a fixed-rate loan) without dilution.

This idea had been discussed on this board for a long time, and finally, there are a group of people are taking action on it.
So, let's if this is a viable option (or backup).

Polygon continues to buy (in CFD), they added another 10m (now 530m).
Shorts continues to drop (now only one over 0.5% left, with 1.22% unchanged since last August)

Will Polygon continue to buy after today's RNS on the termination of the alternative proposal?
Let's see what will happen on this in the next few days.

"Investors need to accept a few home truths. ..."

I am not happy with the AAL deal and not happy with what the SM management did leading to this situation (they use the raised money at full speed without the follow-up funds secured, first simply hope the gov will provide the loan cover; and then JPM could help get h.y.bond tranches). This is either mismanagement or intentional action to get a junior mine project acquired by a big miner.

However, I agree with those truths illbetabuck mentioned.
I have not registered to vote, and believe that under the current situation, the IIs will vote for the AAL deal (although the number of PIs may be still quite large, I gather only a small percentage will go through all the procures to get their shares of the vote counted). Most IIs have not sold their shares; they must have no doubt that their vote will hold this backstop in place if by the date of the vote no other options emerge or no any twists happen

So are the bod getting worried that a no vote is gathering momentum?????

Yes, with this RNS, they wanted to get rid of the hope that PIs have for the next few days, weeks, or after a no vote; therefore to support the AAL deal.

Pelham Capital Limited sold more (40m shares at 5.4p).
But more IIs of SM have not sold their shares. In addition to Polygon, there are also other IIs adding their holdings, e.g.,
Capstone Investment Advisors LLC added 9m shares at 5.41p.