Shares of Scarborough-based Sirius Minerals plc, the firm behind the controversial $2.9 billion fertilizer mine in North Yorkshire, fell 29% on Tuesday after it suspended a $500 million junk bond sale.

The bond sale is crucial for the funding of Sirius Minerals’ polyhalite mining project in North Yorkshire. 

Reuters reported that the $500 million bond is part of second stage financing for the North Yorkshire project, which includes a $2.5 billion credit facility, a $425 million equity raise and a $507 million convertible bond issue. 

“Sirius Minerals Plc has decided to suspend the proposed offer by its wholly owned subsidiary of $500 million of senior secured notes due 2027 previously announced by RNS on 19 July 2019 due to current market conditions,” said Sirius in a stock exchange statement.

“The company intends to revisit the market when conditions have improved later this quarter.”

Polyhalite can be used as a fertiliser but it is a largely untested product and Fitch Ratings last month signalled it expected to give the bond issue a ‘B’ rating due to a number of risks. 

“I imagine it was pulled as even before the recent volatility (on global financial markets) they were going to need to pay around 13%,” one London based high-yield buyside analyst told Reuters.

“I imagine that it would be quite a bit higher today. It’s an amazingly ambitious project. More project finance than typical high-yield.” 

Analysts at Liberum said in a note to clients: “Progress will continue at site …

“Cash reserves have been guided to the end of September, although there is likely to scope to extend slightly longer if financing discussions push up against that deadline.”