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Sirius Minerals share price down 60% after pulling $500 million bond issuance

The UK-based fertiliser developer saw its stock value crash after pulling its $500 million bond sale for the second time this year and recording a £14.3 million operating loss.

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Sirius Minerals stock lost more than half its value on Tuesday morning after announcing to investors that it has pulled its $500 million junk bond issuance and the UK government said it won’t support its potash mine development in North York Moors.

The company’s CEO Chris Fraser said that the decision to pull the bond sale, which was crucial to unlocking a further £2 billion via a credit facility from JP Morgan, was due to ‘ongoing poor bond market conditions’.

Sirius Minerals told investors on Tuesday that it has sufficient capital to cover its six-month strategic review period but admitted that $400 million it raised earlier in the year via a convertible bond issuance would need to be returned.

Sirius Minerals stock down 60%

Following the announcement, the company’s share price tumbled 60% to 4p a share, with Sirius Minerals management forced to slow development on its Woodsmith mine.

‘The company will now conduct a comprehensive strategic review over the next six months to assess and incorporate optimisations to the project development plan and to develop a different financing structure for the funds required,’ Fraser said.

‘The process will incorporate feedback from prospective credit providers around the risks associated with construction and will include seeking a major strategic partner for the project,’ he added.

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Sirius Minerals reports £14.3 million half-year operating loss

Adding to the company’s troubles, it also announced a £14.3 million operating loss in its half-year results on Tuesday.

Sirius Minerals also saw its request to the UK government to guarantee $1 billion worth of bonds rejected, a move, which if successful would have helped the miner secure the financing package it desperately needs.

‘The government has reviewed the case for the provision of the support requested to facilitate the financing of the project and has decided not to provide the support requested,’ the company said.

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