LONDON (Reuters) – Sirius Minerals opted to press on with a more complex and expensive funding package to develop its giant potash mine in Yorkshire to avoid a longer wait for government-backed financing, a source familiar with the deal told Reuters.
Sirius had planned to secure a debt financing package for the $3 billion (£2.3 billion) Woodside project – one of the largest mines to be built in Britain for years – from the government, with the rest funded by the market.
The mine has been touted by British Prime Minister Theresa May as the kind of project that fits “the northern powerhouse” — a government scheme to boost investment and jobs in the north of England. In January, finance minister Philip Hammond said discussions on government backing for the project were ongoing.
But uncertainty over the timing of government funding prompted Sirius to turn to the market for a more expensive financing package, the source said, asking not to be named as he is not authorised to speak publicly.
On Tuesday the company launched a $3.8 billion (£2.9 billion) financing plan provided by J P Morgan Cazenove, which includes a share offering, a convertible bond issue, a senior secured bond deal and a revolving credit facility to fund the project, which would access a deposit of potash in the form of polyhalite.