One of Sirius Minerals’ largest investors urges company to find alternative rescue deal with just weeks remaining before it collapses
One of Sirius Minerals’ largest investors has urged the company to find an alternative rescue deal with just weeks remaining before it collapses.
Global mining giant Anglo American offered to buy potash miner Sirius for 5.5p per share earlier last month in a £405m swoop.
But Jupiter Asset Management, Sirius’s second largest investor, said the board of directors should hunt out alternatives so shareholders can choose between multiple bailout packages.
Running out of time: Jupiter Asset Management said the board of directors should hunt out alternatives
Sirius is attempting to develop the world’s largest deposit of potash in the North York Moors National Park.
But the £3.8 billion project is close to collapse after it failed to complete a financing package last September – and will run out of money by April.
Sirius’s shares price has fallen from 20p this time last year, to 5.8p today, and it will need to down tools if it does not secure a lifeline soon.
Last month shareholders were left stunned by a revelation, buried deep in the announcement confirming Anglo’s takeover, that said Sirius was also approached by an unnamed consortium.
Sirius said the group’s offer to put in a £519m funding package to cover the next phase of work at the Woodsmith Mine was not viable.
Crucially, such an offer would keep Sirius as a listed company and allow loyal investors – including 85,000 private shareholders – the chance to earn back money they have lost as its share price plunged.
Now many want to know the terms of that proposal and for the company to look into it further – even though Sirius said the only viable option was the 5.5p bid. Steve Davies, manager of the Jupiter UK Growth Fund, said: ‘We would like the board to pursue any alternative options, including the consortium of financial investors who submitted a proposal for a £519m funding package earlier in January, within the remaining time available.
‘We would like to be able to consider a stand-alone financing proposal that would enable shareholders to remain invested in the project, as an alternative to the existing offer from Anglo American.’
Jupiter did not say how it planned to vote if there is no alternative to the Anglo bid.
A date for a shareholder vote on the Anglo takeover has not been set – but will take place in a matter of weeks.
The company was a favourite of retail investors and private holders are thought to control as much as 50 per cent of its shares.
Sirius declined to comment.