Sherritt International Corp T.S

Further Improved Bond Bid

[Contrarian333]

SCN    8½   26	70.000	-	78.000
SCN    10¾  29	45.000	-	50.000

[thenorthvanman]

Any chance some of that is Sherritt buying it's own bonds?

[Contrarian333]

I would have said no previously but after talking with them the other day I would say "maybe".

[rkhosla]

Contrarian - if they have cash on hands to 'maybe' retire some of their bonds, then were they able to tell you they had received a JV payment???  

[Stratocheif]

If they have extra cash on thier hands I think they Damm well better pay the interest they owe on the PIK bonds. What are they waiting for. Oh I know....they know they don't have to and they know they never will have to

[Contrarian333]

Re last two comments: 1. of course they did not tell me whether they have received a JV payment- you need to go read up on selective disclosure of material insider information. 2. to this guy always whinnying about the bonds - the PIK bonds are paid semi annually in EITHER cash or incremental bonds - that is their obligation. Nothing further.   

[rkhosla]

lol well you always seem to have the inside scoop so was simply wondering if you had a 'hint' that Cuba has been paying up... alas, i will wait until q1 report and inevitably be disappointed once again.  .

[Ventoux]

And furthermore the default payment is PIK. 

[Stratocheif]

Ya. Tell me something I don't know. This is 10.75% interest. One would argue its good to pay it off. But knowing them they don't care ...even if that debt doubles or triples or whatever, they will never pay anything because in the event if restructuring or liquidation, the pik bonds are at the end of the lime behind other creditors so whoever holds them gets zero

[rkhosla]

An extremely valid point. In choosing payment in kind they are allowing it to compound. It is expensive debt as it is and it would be smart to pay the coupon in cash and prioritize this particular debt for retirement. Like a mortgage payment, paying some extra upfront saves you a disproportionate amount in the long run.

[Ventoux]

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

[Maxmoe]

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

[Maxmoe]

Both trust indentures are filed on sedar on sept 1,2020 if you want to read. Can't help with terms and covenants of banking agreements. You could try asking the company if they are or are not currently precluded from buying back either bond issue in the market. Let us know if they reply!

[Maxmoe]

While you are at it, ask the company if a Cuban government entity could buy the bonds at 50 cents and use those securities in kind to pay off the sherritt receivable. That would be cool. 

[Stratocheif]

Are you aware of a declaration of a NCIB? I'm not. If you are can you please let me know whereit it published.

[Maxmoe]

NCIB is for stock purchase. Why would they buy back stock with all the debt outstanding and cash stranded in Cuba?

[Stratocheif]

I'm not an expert in securities law but I own another company GCM who recently got approval specifying it can do a NCIB for its stock and its bonds as well. It makes sense because any time a company intendeds to make significant purchases of any of its securities, it can affect prices so it needs to be controlled by the SEC. in any event, I think sherritt is cash strapped, Cuba is cash

[Ernieandbert]

1) Only listed bonds need to have an NCIB.  OTC bonds, like S's 2nd Lien bonds, can be purchased and retired by the company any time and at any price.  This is in the Indenture of this bonds and every other OTC bond I know of 2) Have you worked out what the FCF S will produce in 2022 at this Ni price of ~U$14.80 (where it is today)?  How about C$260mm...that is on Ebitda of C

[Ernieandbert]

And I forgot to mention...the EV calculation includes NO Cash...either in Canada or Cuba.  If you include even the Cdn Cash, then it is trading with negative EV for 2023.  Anyone know of another company trading that cheaply, please tell me?  And with tailwinds on the electrification of the world, especially after the past month of pain in fossil fuels.  The Green revolution

[Contrarian333]

RET.A (Reitman's) !

[Ernieandbert]

true.  not the same tailwinds...large, poor fashion women's clothing vs Ni for global electrification

[Ventoux]

Contrarian333 replied "RET.A (Reitman's) !" Another company that restructured without dilution to the shareholders! I thought debt ranked senior to equity. Am I missing something here?

[Maxmoe]

You'd have to comb through all the ccaa filings to see who got the mine and who got the shaft but looks to me like hundreds of store locations were just shut down without penalty for walking away from the leases, unsecured creditors like clothing manufacturers got smacked, and as usual the little guys, 1000s of employees, were booted with no severance. I can't see in press releases how

[Contrarian333]

It is situation dependant.  In the case of RET.A. the creditors were landlords and suppliers.  Right from the beginning the CFO was telling me that dilution of common shareholders was not something they were considering.  However, sometimes these "considerations" can be thrust upon a Company by aggressive bondholders.  In this case, the Monitor recommended that

[SilenceDogood1]

Contrarian333 - I'm curious and I have a question Who the f**k are you and why do you know so much about these different securities?  I mean Sherritt to Reitman's - that is two pretty different sectors. Dog

[autofocus111]

Maybe he runs a vulture fund?

[Stratocheif]

Hey calm down hahaha. All input is useful here. I like to see a good debate, especially about sherritt. And we never know for sure what expertise any poster has. Evaluate every post and decide if it adds value to the debate. Some other companies you go on thier board and it's dead man. That's no fun at all

[Maxmoe]

So true. Then there boards swamped by trolls like our buddy on sic,Gcm,nfg,

[Maxmoe]

All very interesting but I'm interested in sherritt for its nickel production exposure. There are junior explorers that pop up for every element in the periodic table if it gets popular like Ni, but there are virtually no public producers to invest in that will benefit from high prices for the next few years at least. I ain't buying a Russian producer that's for sure, even if Cuba is

[hurko22]

This post has been removed in accordance with Community Policy

[Maxmoe]

Spot on! But not spot nickel, who TF knows what that is.

[Maxmoe]

Oh, if only! If only the sec had jurisdiction here. Sadly, sherritt is the subject of ineffective,timid,useless,etc etc etc OSC. Only worse regulators are BCSC who regulate most of the tsx-v stocks. Re the NCIB, it is a routine annual event for most companies to announce the renewal of the NCIB. It's an exemption to securities laws that must be simultaneously approved by the tsx, bod