(Reuters) - Sirius Minerals fell more than 20 percent on Tuesday after the miner launched a $3.8 billion (£2.9 billion) financing plan, including a discounted share offering, to fund its North Yorkshire polyhalite project in the United Kingdom.
The capital will be used to complete the project, allowing the company to extract the mineral salt from what it said was the world’s largest known high-grade polyhalite deposit.
Polyhalite can be used as a fertiliser and has other potential industrial applications. Sirius has already inked several deals for fertiliser supply to Europe, South America, China and Africa.
The financing will consist of a revolving credit facility of up to $2.5 billion, a $400 million equity raise, a $644 million convertible bond issue and a $500 million senior secured bond issue. About $400 million of the convertible bond offering was fully underwritten at launch, the company said.
The equity component will involve the issue of new shares at a price of 15 pence to 18 pence each. The resource developer’s shares closed at 21.90 pence on Monday.
The North Yorkshire headquartered company separately posted a smaller loss for the full year ended Dec 31.
Shares traded down 14.8 percent at 18.65 pence by 0800 GMT, after hitting 17.50 pence earlier in the session, their worst intraday percentage loss in over seven months.
Reporting by Devika Syamnath in Bengaluru; Editing by Subhranshu Sahu and Saumyadeb Chakrabarty