January 20, 2020 @ 10:10 by Steven Hugill
Bosses behind a 4000-job fertiliser development straddling Teesside and North Yorkshire have agreed a £405 million sale.
Sirius Minerals has agreed terms on a takeover bid from Anglo American Projects UK Limited, saying the deal will save the business from potential liquidation.
The offer, worth 5.5p per share, includes Sirius’ polyhalite mine, based on the outskirts of Whitby.
The deal comes after Sirius was last year forced to slow mine construction and carry out a review following tough market conditions, which resulted in the cancellation of a bond offering and the shelving of a £400 million fundraiser.
Russell Scrimshaw, Sirius Minerals chairman, said the offer from Anglo American Projects UK Limited, also known as Bidco, was a “fair approach”, warning the business could be placed into administration or liquidation if shareholders don’t approve it.
Known as the Woodsmith Mine, Sirius’ development is being constructed to extract the fertiliser polyhalite, which is reputed for encouraging strong crop growth.
The company has long planned to move its polyhalite underground from Whitby to a storage site at Wilton, near Redcar, before being exported from a new harbour.
Production is also earmarked for 2021, with Sirius previously saying the development will create 1000 direct jobs and support another 3000 in the construction phase and eventual supply chain.
Revealing the company’s decision to accept Bidco’s offer, chairman Russell said: “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.
“Following the strategic review process…Anglo American’s offer is the only feasible option.
“We regret we are not able to deliver on our long-term goal of Sirius being able to deliver the project into production, although we assure all stakeholders that the team has worked tirelessly and diligently over the last nine years to try and achieve that.
“However, given the current cash constraints of Sirius, and lack of realistic and deliverable alternative financing and development options, we believe this to be a fair approach from Anglo American.”
Speaking about the acquisition, Mark Cutifani, Anglo American chief executive, added: “Our recommended offer provides greater certainty for Sirius’ shareholders, employees and wider stakeholders, while bringing the prospects for the development of this potential tier one project closer to reality.
“We intend to bring Anglo American’s financial, technical and product marketing resources and capabilities to the development of the project, which of course would be expected to unlock a significant and sustained associated employment and economic stimulus for the local area.”