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Sherritt International Corp T.S

Alternate Symbol(s):  SHERF

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.


TSX:S - Post by User

Post by Contrarian333on Jun 28, 2023 12:25pm
233 Views
Post# 35518733

The Press Release

The Press ReleaseWhile the completion of Year 1 of the cobalt swap is good news and confirmation of the Cuban's committment to the agreement, the real but subtle gem is further in the news release - the decision to pay the PIK bond interest in cash.  Two interest payments in cash allow for the use of "Restricted Cash"  in returning capital to shareholders.  The amount of capital available for this purpose is defined in the Trust Indenture for the 8.5% bonds due 2026 in Section 4.07 Limitations on Resrticted Payments (don't try to calculate it you will only hurt your head.  Trust me when I say the amount is very substantial.)  So absent a negotiation to expediate things, one would expect to see a significant share buyback begin after the PIK cash interest payment on January 31, 2024.  The return of significant cash to shareholders will remind the bondholders of their structural subordination to shareholders in this very unique situation and soften their relative negotiating position as the Company moves toward a low/no debt status. 
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