Sirius Minerals announces change-of-control under 5% convertibles

By Sarah Lizee

Olympia, Wash., Feb. 7 – Sirius Minerals plc announced an upcoming change of control under its $106.6 million 5% guaranteed convertible bonds due 2027 (ISIN: XS1991118255) issued by Sirius Minerals Finance No. 2 Ltd. in connection with Anglo American’s forthcoming takeover of the company.

The acquisition is set to be carried out through a scheme of arrangement. If the scheme becomes effective, Anglo American Projects UK Ltd. will become the holder of the entire issued share capital of Sirius.

Under the terms of the acquisition, holders of Sirius shares will be entitled to receive the offer price, which is 5.50 pence in cash for each Sirius share held.

Under the bonds’ terms, the exchange price may be adjusted downwards in some circumstances, including, for a limited 60-day period only, following the occurrence of a change of control.

Sirius said it is proposing that holders continue to hold their bonds until at least the end of the change-of-control period.

Assuming that the change-of-control notice is given on March 31, the last day of the change-of-control period would be May 30.

If the scheme becomes effective on March 31, the exchange price is expected to be $0.2443 per Sirius share and the change-of-control exchange price is thus expected to be $0.1997 per Sirius share.

Bondholders who continue to hold their bonds until at least the end of the change-of-control period will receive the interest payments to be made on Feb. 23 and May 23. They will continue thereafter to retain the right either to continue to hold their bonds for a longer period, including until maturity, or to convert their bonds at the prevailing exchange price.

Bondholders who exercise the conversion right before the change-of-control period will not be entitled to the change-of-control exchange price and will receive the offer price for each Sirius share they would otherwise have been entitled to on conversion, rather than the resulting Sirius shares.

Bondholders who exercise their conversion rights during the change-of-control period will receive the change-of-control exchange price.

Any exercise of conversion rights after the expiry of the change-of-control period will be at the prevailing exchange price.

Following the occurrence of a change-of-control, holders will have the right, during a 60-day period, to require the bonds to be redeemed by the issuer at their accreted principal amount plus accrued interest.

If conversion rights have been exercised and/or purchases have been affected for 85% of more of the bonds, the issuer will have the right to redeem the remaining bonds at their accreted principal amount plus accrued interest.

Sirius is a U.K.-based fertilizer company.

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