3.10pm: a recap

While the market waits for the results coming up later today, here are the key points of today’s meeting:

  • The board has been firm that the takeover is the only viable solution for Sirius to carry on
  • They also said Anglo could still buy Sirius from administrators when it inevitably goes bankrupt
  • The mine is expected to need another US$3.1bn to reach completion
  • Chief executive Chris Fraser has said that while the project was “the greatest success” of his career, the financing issues were “the greatest failure”
  • Some investors admitted they were not ready to give up on the Sirius dream
  • Boris Johnson’s government chose not to help the project, said to be “the poster child” of supporting the North of England, according to Fraser
  • Some investors later pointed out a failed takeover by Anglo could prompt Westminster to act

 

2.45pm: results of the vote

Investors will have to sit and wait now, as Sirius Minerals should publish the results of the vote later on Tuesday.

We will report the results here when they arrive.

1.40pm: vote is underway

The vote now is underway. The deal needs approval from shareholders owning 75% of Sirius to go ahead.

Today there are some retail shareholders but the bulk comes from proxy votes.

Half of the company is owned by 85,000 private investors.

Among institutional investors, hedge fund Odey Asset Management owns 1.73% of Sirius and has been openly criticising the offer.

Jupiter Fund Management, holder of 7.8% shares, is reportedly backing the deal.

 

1.20pm: Fraser says financing “biggest failure of my career”

Investors appreciate Fraser expressing his feelings.

He says the delivery of this project from an idea to what it has become today is “probably the greatest success of my career”, while the missed financing “the biggest failure”.  

Amid conspiracy theories that Anglo and Sirius worked together to get to this stage, a shareholder admits how feelings got in the way.

 

1.10pm: Anglo will have to spend US$3.1bn

The board says Anglo will have to invest US$3.1bn on top of the US$1.5bn spent by Sirius to get the project going, for 31km of tunnels, two mile-deep shafts and port facilities.

Some people are happy with the deal, while others say a rejection can be a signal to the government.

 

12.50pm: activist group expresses support

A representative of activist group ‘Fund Sirius Minerals” says investors are willing to back the company through a round of funding.

The activists have set out a plan to raise £460mln through bonds to fund the company for another two years.

With the extra £460mln, Sirius could lay out “critical infrastructure development” all the way through 2022.

The sum came up in a strategic review carried out in September.

So far, the initiative has surveyed 1,845 people, who have shown interest in providing over £43mln combined.

 

12.30pm: shareholders ask for a stock offer

Shareholders ask why Anglo American did not propose a stock offer instead of cash.

Fraser says local MP Robert Goodwill did lobby for that option.

Someone asks if the company can freeze for a year.

A shareholder is happy to learn Anglo American is actually British.

 

12.15pm: Fraser criticises the government

In relation to government backing, the board says that Westminster simply chose not to help and Fraser proceeds to criticise Boris Johnson.

The board keeps backing the deal, especially as markets are being depressed by the coronavirus outbreak.

 

12pm: board says Anglo can still seize Sirius from administrators

Fraser says that even if the vote fails, Anglo will still be able to buy Sirius from administrators once it collapses, which is what they expect if the vote is not approved.

Shareholders have been pressing the board to ask Anglo American for a higher offer or else, government loans, but for the board these options are not on the table.

 

11.45am: activist shareholder lambasts Fraser

Chairman Russel Scrimshaw said security has been ramped up following threats to the board and apologised to investors for how the situation worsened, according to reports.

Chief executive Chris Fraser speaks about the failed deal with the government.

Gavin Palmer, an activist shareholder, says Fraser is “stupid”.

 

11am: so it begins

The most anticipated shareholder meeting of the past decade has kicked off in London this morning.

Sirius Minerals PLC (LON:SXX) shareholders are voting whether to accept a takeover offer from global mining giant Anglo American Plc (LON:AAL) or let the troubled fertiliser company carry on its own towards an uncertain future.

Sirius is the developer of what it is believed to be the world’s largest and highest grade deposit of polyhalite in North Yorkshire, England, but was hit by funding problems.

The share price plummeted from 20p a year ago to 4.5p today.

Mining giant Anglo American Plc (LON:AAL) came to the rescue with a £405mln offer to take over the fertilising company, valuing it 5.5p per share.

However, a plethora of investors who paid double or triple that amount said it “significantly” undervalues the firm.

Plus, half of the shares are owned by 85,000 individuals some of whom claim to have poured their lifetime savings into the project, fearing a big hit on their personal finances.

While the board is backing the deal in fear of bankruptcy, a group of activist investors have been criticising the directors for not asking for more support.

According to a strategic review carried out in September, Sirius needed £460mln to start the project.

However, the money was nowhere to be found and the board recommended shareholders to approve the takeover by Anglo American instead.

“At no point during or following the strategic review did Sirius reach out to private investors to request their support with the funding, despite them owning 50% of the shares in Sirius,” action group ‘Fund Sirius Minerals’ said.

“We believe that this was an error on the part of Sirius and a missed opportunity to raise the funds and protect shareholders’ existing investments.”