Sirius Minerals Share Discussion Threads

[not my real name] 17/4/2018 11:05

Nah. Think I have it. If the 200m are used to clear shorts that will reduce the 7% to around 2.5%. Given the risk attached to the project it's entirely possible that level could be "genuine" shorts as opposed to simple hedges.

Shame about the mysterious Chinaman though!

NMRN

[ppvn] 17/4/2018 10:51

Oh and if any of the above isn't clear I can do a long winded example of the financial implications of an already shorted bondholder. Happy to, after getting hopes up with my drunken optimism last week! Ha!

[ppvn] 17/4/2018 10:48

Hey NMRN, have spent a long weekend wracking my brain as to what a high take up could have meant for us and none of the scenarios were looking good, unless it was a buyer or JPM were correct in their assertion that 80-90% were already hedged. So it's clear now it isn't a buyer and our bondholders aren't 80-90% hedged; we are around the 50-55% mark. I'm not sure why it was important to Sirius to get some additional bonds converted, it could be that Muckshifter (thanks for your post btw, was a good read) could be right that financiers wanted overall debt down a bit.

Back to the bonds; the reason some holders have converted is that they (and the drop in outstanding shorts will confirm this) have already sold short their shares. So they need to convert their bonds in time, but could elect to maintain shorts if they had reason to believe they could buy back in the market cheaper. By offering this incentive, Sirius have drawn these "already shorted" holders bonds out by giving them a little more upside and reducing the chance of them buying back in the market thus prolonging the conversion cycle. It's an extended bookrun, and it's just being helped along by this. We still have more shares to get through, aftermarket volumes are still showing a couple of million each day, so we are not there just yet, but churning through. I don't know why they wanted to get the 7% short number down, but as the RNS stated it could be something to do with stage2 requirements.

I was of the expectation last week that conversations had been had; this is obviously not the case which I find a huge relief purely because without either a buyer of 500mm shares or being 80-90% hedged, without our share price going to the upper level of the CB strike there could have been some backroom dealings afoot. There obviously still could be, but both our share price and bondholders actions suggest it's business as usual.

[not my real name] 17/4/2018 10:30

Morning PPVN,

Bizarre exercise indeed. I can't understand why anyone would convert their bonds for what is essentially 6 months interest.

Any thoughts?

NMRN

[ppvn] 17/4/2018 10:20

Would expect the c.300mm declared shorts to drop to around 100mm or thereabouts; won't happen for a couple of weeks at least (shares need to be issued, shorts returned, notifications made). Bizarre exercise but we are in no fundamentally different position to where we were last week. At least bondholders aren't converting their bonds at a disadvantageous rate; I was not optimistic as to what that could imply.

[not my real name] 17/4/2018 10:18

coolhand,

Read it again mate. The 0.16 dilution is purely for the bonus shares.

Actual dilution with all shares taken into consideration is 4.9%

NMRN

[coolhandfluke] 17/4/2018 10:14

Sorry. Just read dilution expected to be 0.16 percent.

[phowdo] 17/4/2018 10:13

If it wasn't almost priced in then the reaction to this mornings news would have been sharper.

[coolhandfluke] 17/4/2018 10:11

Will the introduction of the 218 million shares on 23/4 act as a dilution or are they already priced in as we know it will happen at some point?

[ppvn] 17/4/2018 09:18

How many declared short shares remain outstanding? How many shares to be derived from the converted bonds? Absolute nonsense. Back to 30p and normality resumes shortly. No cash settlement only shares.

[ialwayswinatmonopoly] 17/4/2018 09:17

Investors in bonds do so because they look to get their CASH working in a steady and predictable way. SXX have 'bought' bondholderS out of their positions via a combination of cash and equity. By their nature bondholders invest in bonds and when the bond party is over they get their CASH look to realign them self's with their investment principals but this can't happen until they have their CASH. Therefore, expect these new shares to be offered to the market with immediate effect, which will put the share price under sustained pressure for the time being. How long this pressure will last will depend of daily volume.

[johnwise] 17/4/2018 08:57

Sirius Minerals to swap US$63.8mln of bonds for shares

The UK mine developer expects to save US$27mln as a result of the early conversion.

[johnwise] 17/4/2018 08:50

Sirius Minerals to swap US$63.8mln of bonds for shares

The UK mine developer expects to save US$27mln as a result of the early conversion.

[ppvn] 17/4/2018 08:45

I'm actually relieved about this result. At least the sun still rises in the east and sets in the West. If there had been a high take up our share price should have been up significantly which it obviously wasn't. Lenders might have wanted to see evidence that the shorting activity was hedging; there were two references to this in last week's RNS. So this exercise may indeed have achieved it's purpose. Think 80-90% already hedged is rubbish.

[jw30] 17/4/2018 08:29

The invitation did not achieve its aim. Unfortunately, the company has shown its hand. Looks like the bond holders want more than a pound of flesh, lol.

[johnwise] 17/4/2018 07:57

17/04/2018 7:14am
RNS Number : 1065L

Sirius Minerals plc Results of conversion of convertible bonds

Sirius Minerals' Finance Director and CFO, Thomas Staley, commented:

"We are pleased with the level of participation in our tender process. The total cost of incentivising conversion through the issue of shares was more than offset by the release of escrowed cash and removal of the need to pay interest payments beyond year two. This has enabled us to facilitate an orderly conversion for bondholders and optimise our capital structure ahead of stage two financing later this year."

[rrrrrrrrr2] 17/4/2018 07:54

What and risk being called at par. Think they will make more of the share price goes the other way.

[carla1] 17/4/2018 07:39

Good morning fellow investors Quite a low bond uptake... the holders must think we are undervalued.. sounds good to me

[johnwise] 17/4/2018 07:36

Sirius Minerals plc Results of conversion of convertible bonds

17/04/2018 7:14am
RNS Number : 1065L

Sirius Minerals' Finance Director and CFO, Thomas Staley, commented:

"We are pleased with the level of participation in our tender process. The total cost of incentivising conversion through the issue of shares was more than offset by the release of escrowed cash and removal of the need to pay interest payments beyond year two. This has enabled us to facilitate an orderly conversion for bondholders and optimise our capital structure ahead of stage two financing later this year."

[chrisatbirdies] 16/4/2018 17:24

Hi nmrn.
I am sure we shareholders would get a vote on any takeover.personally I would be gutted to walk from this with 50p.

[not my real name] 16/4/2018 14:50

chrisatbirdies,

If they are to sell out I don't think they ask you mate!

:)

NMRN

[phowdo] 16/4/2018 14:50

We're waiting on this:

"The invitation is open until 3pm (London time) on 16 April 2018. A further announcement will be made as soon as reasonable practicable thereafter confirming the outcome of the Invitation (which is at the sole discretion of the Company). "

[chrisatbirdies] 16/4/2018 14:46

They are working out how they will spend the 50p a share after Glencore buy us out.errr no chance.i will start discussing selling mine at around £2 a share.

[jw30] 16/4/2018 14:40

Very quiet here today. Is this the calm before the storm, lol.