Sirius Minerals could quit stock market, says boss

85,000 small investors braced for huge losses

THOUSANDS of investors could be left nursing heavy losses after the boss of Sirius Minerals suggested the company may be better off quitting the stock market.

Chief executive Chris Fraser said being a publicly-listed company was useful at the beginning when it wanted to be transparent about its plans to build a £4bn fertiliser mine under the North York Moors national park.

But he complained that attacks from hedge funds, bad publicity and its failure to raise money from big investors such as pension funds meant it was no longer as helpful to be a listed company.

Fraser ( pictured) said: ‘Where we are now, I think we might be better off being a private company, because sentiment, shortsellers and all those sort of features are just massively distorting the value of the company.’

His comments will worry the firm’s army of small investors, including many families in villages around the moors who have seen the value of their shares tumble since backing Sirius.

Many of the 85,000 retail investors with a stake in the firm have by Francesca Washtell hung on hoping for a change of fortunes and a recovery in the share price.

But if it is taken private, their losses could be crystalised if the deal values their shares at less than they bought them for.

The stock peaked above 40p three years ago but closed at 3.52p last night, up yesterday by 0.2pc, or 0.01p.

Someone who bought £10,000 of shares in August 2016 would now have around £800.

Sirius has become one of Britain’s most popular retail stocks since Fraser reversed his firm, York Potash, into an existing company on the London Stock Exchange in 2011.

But the share price sank last month after the business failed to secure a complicated financing package that would allow it to finish building the mine.

Fraser told the Mail: ‘ Being public served a very valuable role in the early phase.

‘I intentionally chose the strategy of putting it into a UK publicly-listed vehicle to have complete transparency about who we were, what we were doing, when we were doing things and being very, very open. As we see it today, there’s potential merit in being private simply to get away from the capital markets.’

With doubts mounting over the future of the firm, Fraser turned his fire on ministers.

‘Am I frustrated that the Government hasn’t supported us in the various forms that we asked them for? Of course I am.’

He also sought to blame a lack of support from big investors for his problems.

He said: ‘The capital markets are failing development. Their fundamental role is to provide risk capital to enable growth to take place economically.’

‘Long-term capital just really doesn’t exist any more. Big institutions will define long-term now as three years, and that’s ridiculous because you can’t build anything in three years of significance. And so it essentially means that you see capital provision having to go through another filter, which is that only big companies are allowed to do big projects.’ Sirius will spend the next six months cutting costs and weighing up whether it can raise money from capital markets or strike a deal with a strategic investor. Bringing a strategic investor on board – or going private – would likely dilute or completely wipe out existing retail investors’ holdings.

But, according to Fraser this could be necessary for the company to complete its huge project, which includes constructing two mile- deep shafts and a 23-mile tunnel – longer than the Channel Tunnel – to shift polyhalite, a type of potash fertiliser, to a port on Teesside.

Sirius has cut 300 jobs so far and more will follow, depending on when a financing deal is agreed. If it doesn’t manage to secure the cash, it will go into liquidation.