Sherritt International Corp T.S

Alternate Symbol(s): SHERF

Metals & Mining Industrial Metals & Minerals

Sherritt International Corporation is a Canada-based company engaged in the mining and refining of nickel and cobalt metals essential for the adoption of electric vehicles. The Company is engaged in the production of high purity nickel and cobalt metals from lateritic ore. Its technologies group creates solutions for oil and mining companies around the world to improve environmental performance. It is also the independent energy producer in Cuba. The Company offers a range of products including Nickel, Cobalt, Fertilizers and Other Products. The Nickel products category includes standard grade, steel grade, and nickel powders. The Cobalt products category includes cobalt briquettes and cobalt powders. The Fertilizers product category includes anhydrous ammonia, granular ammonium sulfate, crystalline ammonium sulfate-super salt, and crystalline ammonium sulfate-standard grade. The Other products category includes sulfuric acid, zinc sulfide, and copper sulfide.

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Sherritt International Corp > John David’s question

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Comment by rkhoslaon Nov 03, 2022 6:06pm

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Post# 35071239

RE:RE:RE:RE:RE:RE:RE:John David’s question

I don't see what you are seeing. They spell everything out quite clearly here. Trade account receivables went up to $200mil because we sold more stuff. Inventories went up because the piles of sulfur and tanks of deisel we have sitting there cost more. As Friendo said, cash in the JV actually dropped. So where is the secret pile of money? I don't see it. Where do you get your $421mil and $599mil from?

Ernieandbert wrote: The "pin" is put in on all cash liability stock units at a Board meeting late Jan/early Feb accoring to what the co has told me. Yes, it would be great if this stock can stay depressed till then.

I know there are many at S that do not want to see the departed execs who were granted these mammoth units to work through the restructuring, reap any further comp than they did over all those years.

Which is just part of the reason S has and still is intentionally keeping cash off the b/s...partially to keep the stock price depressed so 1) new execs can get some units and 2) so they don't have to pay Pathe more than he took out of this co and importantly - so they do not meet the test of min liquidity on the excess cash flow sweep on the 2nd Lien notes. They need to keep cash off the b/s so they don't have to buy back bonds at or above Par and cna hopefully buy them back at 85 and 55. They want investors to believe they don;t have the liquidity, but...

Look at Page 67 in 3Q22 Supplemental Info: Working Capital is building up substantially. It end YE21 at about $421mm and as of the 3Q22 is was $599mm...almost 50%higher in 9mos. That almost $600mm/2 = $300mm for S on top of 400mm shares = ~$0.75/share! To be fair, they do need some working capital in Moa but this is getting insane. I have written about this before for all you wondering "where the cash is?" It is at the opco (Moa) for very intentional reasons...1) so they can buy as much debt back as possible below Par and 2) keep the stock suppressed so the settlement of units is lower adn new mgmt can accumulate at this lower price.

And why do they need to buy back bonds asap? Because the covenants are onerous...mainly the restricted payments which limit their ability to buy back stock. I bet they do a bond tender every Q for the next year.

If they need $200mm of working capital at Moa, that would release $400mm/2= $200mm for S...that alone would buy back about 2/3rds of the 2nd Liens, which have the more restrictive covenants.