Stocks & Shares Mining

Sirius share price posts another hefty fall amid analyst comments

Sirius Minerals’ (LON:SXX) share price has posted another hefty fall in today’s session, with analysts and investors mulling over the group’s move to scrap its previously proposed $500-million bond sale. The company, which was looking to finance a fertiliser mine in North Yorkshire, blamed current market conditions for the move.

As of 14:50 BST, Sirius’ share price had given up 7.07 percent to 4.34p. The Financial Times reported earlier today that the company now has a market value of £270 million, or around 20 percent of the money it has already sunk into developing shafts and tunnels for the mine.

Experts weigh in on Sirius

The FT quoted Richard Knights of Liberum Capital as commenting today that based on comments in Sirius’ release yesterday, and on the conference call, the company now appeared to “be looking at ways of reallocating risk in the financing structure to appeal more to debt capital providers”.

“In a nutshell, this likely means annexing the high risk capital items (i.e. the shaft) from the bond by bringing on third party or strategic investors to finance it,” the analyst pointed out, adding that this kind of solution could improve credit risk by removing creditor exposure to the shaft “and possibly providing a level of strategic expertise and/or additional balance sheet strength”.

Proactive Investors meanwhile quoted Russ Mould, investment director at AJ Bell, as pointing out that given the current situation it was ‘highly likely’ that Sirius investors would suffer further as the firm “may have to raise more money or sell a chunk of its business to a new strategic investor on unfavourable terms” due to its now desperate need for cash.

Analyst ratings update

Liberum has placed its rating on the troubled company ‘under review,’ while slashing its target on  the Sirius share price from 40p to 9p. According to MarketBeat, the group currently has a consensus ‘buy’ rating and an average valuation of 20.33p.

Sirius Minerals’ (LON:SXX) share price has posted another hefty fall in today’s session, with analysts and investors mulling over the group’s move to scrap its previously proposed $500-million bond sale. The company, which was looking to finance a fertiliser mine in North Yorkshire, blamed current market conditions for the decision.

As of 14:50 BST, Sirius’ share price had given up 7.07 percent to 4.34p. The Financial Times reported earlier today that the company now has a market value of £270 million, or around 20 percent of the money it has already sunk into developing shafts and tunnels for the mine.

Experts weigh in on Sirius

The FT quoted Richard Knights of Liberum Capital as commenting today that based on comments in Sirius’ release yesterday, and on the conference call, the company now appeared to “be looking at ways of reallocating risk in the financing structure to appeal more to debt capital providers”.

“In a nutshell, this likely means annexing the high risk capital items (i.e. the shaft) from the bond by bringing on third party or strategic investors to finance it,” the analyst pointed out, adding that this kind of solution could improve credit risk by removing creditor exposure to the shaft “and possibly providing a level of strategic expertise and/or additional balance sheet strength”.

Proactive Investors meanwhile quoted Russ Mould, investment director at AJ Bell, as pointing out that given the current situation it was ‘highly likely’ that Sirius investors would suffer further as the firm “may have to raise more money or sell a chunk of its business to a new strategic investor on unfavourable terms” due to its now desperate need for cash.

Analyst ratings update

Liberum has placed its rating on the troubled company ‘under review,’ while slashing its target on  the Sirius share price from 40p to 9p. According to MarketBeat, the group currently has a consensus ‘buy’ rating and an average valuation of 20.33p.

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