Sirius Minerals plc (LON:SXX) Update on the alternative proposal

On 20 January 2020, the Boards of Sirius Minerals Plc (Sirius), Anglo American plc (Anglo American) and Anglo American Projects UK Limited (Bidco) announced that they had reached agreement on the terms of a recommended cash acquisition of the entire issued and to be issued ordinary share capital of Sirius by Bidco (the Acquisition), to be effected by means of a scheme of arrangement under Part 26 of the Companies Act 2006 (the Scheme).

Further to the publication of the circular in relation to the Scheme (the Scheme Document) by Sirius Minerals Plc (Sirius) on Friday 7 February 2020, the Sirius Board (the Board), in conjunction with its financial advisers, has continued to explore the potential debt financing proposal from a consortium of financial investors (the Alternative Proposal) to raise a US$680 million funding package to cover the initial scope of work. This would have been a precursor to needing to raise a further US$2.5 billion of capital to reach an installed and ramped up production capacity of 10 mtpa.

As described in the Scheme Document the terms and conditions required to satisfy the Alternative Proposal were the following: (i) Sirius to undertake a substantial new equity raising, (ii) concessions from some of Sirius’ major creditors, (iii) certain local authority approvals, and (iv) further due diligence. The Board confirms that the Company has not been able to secure an institutional anchor investor willing to provide sufficient support for the Alternative Proposal which was part of the consortium’s requirements. Without an institutional anchor investor providing the majority of the equity required, the consortium of financial investors have informed the Board that they do not consider the Alternative Proposal to be viable and have therefore ceased discussions with the Company.

As stated previously, if the Acquisition is not approved by shareholders and does not complete there is a high probability that the Sirius Board will place the business into administration or liquidation. Therefore, the Sirius Board unanimously recommend that Sirius Shareholders vote in favour of the Scheme at the Court Meeting, and that the Sirius Shareholders vote in favour of the Resolutions to be proposed at the General Meeting, as all of the Sirius Directors have irrevocably undertaken to do in respect of their own legal and/or beneficial holdings of Sirius Shares.


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