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 through hydrometallurgical processes. 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. 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 Company’s 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 > Further Improved Bond Bid

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Comment by Maxmoeon Mar 29, 2022 2:45am

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Post# 34554336

RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Further Improved Bond Bid

I don't own the bonds so I've never read the indenture agreement. Nor am I privy to the terms of any of their banking or loan agreements. Is it not possible, even if the cfo, the treasurer, the ceo, the entire board and the janitor want to buy bonds in the market at 50 cents on the dollar, that the terms of any or all of the above agreements preclude them from buying back bonds in the open market? Could they be forced to pay call premium and pay off all bank lines first? I've seen it before with other bankers and/or bond issues.

Ventoux wrote: As at January 31, 2022 there are $87.0 million of the 10.75% unsecured notes outstanding, as per the 2021 Annual Information Form dated March 24, 2022. (Available on the Sherritt International website).

If the company chose to make the next interest payment in cash, the outlay would be $4.67625 million. Alternatively the company could issue $4.67625 million of additional PIK bonds and buy those bonds and more back in the market at a substantial discount to what they were issued at. On Friday, Contrarian333 kindly shared a fresh quote on the 10.75% notes of 2029, $45.00 Bid - $50.00 Offer. If the company chose to not pay the $4.67625 million in cash, but rather in PIK bonds they could theoretically purchase back $9.3525 million worth of the bonds, assuming they could purchase them at the offering price of $50.00 using the cash they did not pay out. Or they could use $2.338125 million to buy back the newly issued PIK bonds and use the remainder to purchase 8.5% cash pay notes at a discount to par as well. Sell high and buy low! Even if they had to pay through the offering price it would be a very attractive purchase. As the 10.75% notes are PIK they trade interest flat, at least they did when I purchased them some time ago. Do your own DD on this. Re-purchasing PIK notes interest flat prior to the next payment date (July 31, 2022) would cancel the purchased notes PLUS the accrued interest attached to them, a further win for the company and its stakeholders.

Contarian333 please chime in if I am missing something.

Are they purchasing these bonds, or for that matter the cash pays? I don't have a clue, but if I was the treasurer I know what I would recommend.

GLTA