Shareholders in a major British fertiliser mining project have been urged to accept a "shock" takeover offer or risk seeing the troubled business collapse.
Investors in the North Yorkshire scheme operated by Sirius Minerals - many of them local residents who ploughed in their own savings - were told the proposal by FTSE 100 giant Anglo American was the only "feasible" option.
The £405m bid values the company at 5.5p a share, compared to a value of more than 20p a year ago and as much as 44p in 2016.
However, it is higher than the 4.1p price at which the shares were trading prior to the Anglo America discussions being revealed.
Earlier this month, the FTSE 100 company said it was in "advanced discussions" over a takeover of the company, which could save hundreds of jobs.
Now Sirius has agreed to recommend the deal for approval by shareholders.
Chairman Russell Scrimshaw said alternative solutions to finance the project had been proposed which were "not acceptable".
Instead, it is asking shareholders to back a deal which values current shares at £386m plus stock worth £19m which will be issued as part of employee share plans.
Mr Scrimshaw said: "We acknowledge that to many shareholders our decision as a board to recommend this offer will have come as a shock."
He said the board deeply regretted that it could not complete its previous plans to fund the project and recognised that the offer did not represent a return that shareholders had hoped for.
"However, given the current cash constraints of Sirius, and lack of realistic and deliverable financing and development options, we believe this to be a fair approach from Anglo American, a company committed to approaching the project in the right way, and with the resources to complete the job," he added.
"We now face a stark choice.
"If the acquisition is not approved by shareholders and does not complete there is a high probability that the business could be placed into administration or liquidation within weeks thereafter.
"This outcome would most likely result in shareholders losing all of their investment, as well as put the future of the entire project, and its associated benefits for the local area and the UK, at risk."
In September, Sirius was forced to scrap a £400m plan to raise funds in the bond market for the polyhalite mine, delaying the project.
It launched a review which included a search for a new partner and investor. The UK government had declined to back it.
The plan involves tunnelling under the North York Moors National Park to exploit what Sirius has said is the world's largest deposit of polyhalite.
The mineral would be transported through a 23-mile long tunnel to Teeside, from where it would be shipped to customers.
Last year, Sirius said 1,200 jobs related to the development of the mine would be lost if the company could not raise the funds needed to proceed.
The project would be the first deep mine to be sunk in Britain for 40 years.
But it has struggled to attract financing and analysts have questioned whether there is a market for the kind of fertiliser it would produce.
It has also attracted opposition from campaigners concerned about its impact on the North York Moors landscape.
https://news.sky.com/story/mine-project-investors-urged-to-accept-shock-cut-price-deal-11913284
2020-01-20 10:12:12Z
CBMiX2h0dHBzOi8vbmV3cy5za3kuY29tL3N0b3J5L21pbmUtcHJvamVjdC1pbnZlc3RvcnMtdXJnZWQtdG8tYWNjZXB0LXNob2NrLWN1dC1wcmljZS1kZWFsLTExOTEzMjg00gFjaHR0cHM6Ly9uZXdzLnNreS5jb20vc3RvcnkvYW1wL21pbmUtcHJvamVjdC1pbnZlc3RvcnMtdXJnZWQtdG8tYWNjZXB0LXNob2NrLWN1dC1wcmljZS1kZWFsLTExOTEzMjg0
Bagikan Berita Ini
0 Response to "Mine project investors urged to accept 'shock' cut-price deal - Sky News"
Post a Comment