Sherritt International Corp T.S

Ni dipped below $12 during today's session

[rkhosla]

eom

[Ernieandbert]

I think most people are watching the price of 3 month Ni on the LME on this board.  No need to state the obvious.  And it closed at U$12.24/lb (26,990/MT) in case you are glancing at it periodically and providing us with periodic updates.  More insight, or understanding, on accounting, cash flow analysis, indenture analysis and valuation would be far more insightful on this board.&

[rkhosla]

hhhmm maybe the two of you need to get yourselves a private room to intoxicate one and other with your 'indenture analysis'.  As both of you independently have asserted (undoubtedly correctly), your intelect outshines the rest of this lowly board, most analysts, and obviously the broader investor community.  It only reiterates for me however that the financials and the corporate

[YourFriendo]

It's actually quite easy to figure out the financials. And they are terrible.

[Ernieandbert]

I appreciate many of your points (honestly...like the co does a horrible job of relaying to the Analysts and investors about all things S), but why are you "in deep" on S when you clearly don't understand their finanical reporting, their cash flow through the org chart (which is complicated) or their debt obligations (which are key to what has been going on the past three quarters)?&

[rkhosla]

Deeply underwater two years ago and subsequently in deep as I multiplied down at levels $.30 as I saw deep deep value and price mismatch and had faith.  Kinda as simple as that.  It has worked out nicely for me but I will hang in longer. Thanks for your response.  My point is like NVMan's - the broader market will not jump aboard until we are strongly consistantly in the black

[Ernieandbert]

I agree with all that.  My conviction is based on more in depth analysis than the street analysts but you are correct.  It won't pop up until it is easily understood.  Imo that may take a couple more Q's.  They can't hide the cash in working capital forever.  Poor job relaying their story to investors.  And this is a forgotten orphan.  But when it

[Ventoux]

I am catching up on my Sherritt reading and this sentence stuck out like a sore thumb. "What we need now is someone to be long bonds and short stock more than that one fund currently is."                                                          

[Ernieandbert]

Exactly.  Regardless of the tender and any holder's desire to tender into it, it would be nice to have a big short in this stock...otherwise it is just a pile of small retail longs like us all sitting around waiting, waiting and waiting.  Either need a big Insitution to come in and establish a new long or need some ballsy short.  

[Maxmoe]

5 million short is pretty ballsy if you ask me. I can't see any big institution coming in any time soon without life altering changes to Cuba. There were a few when Delaney was in charge but that's long,long ago when there was hope of change.

[Abruzz0]

Just as we saw over the past 4 months, the market is too volatile to call.  As a long time Sherritt holder, the key to this is really the long ter prospect. Not the short term highs and, more usually than not, lows.

[FCPlady]

Tried to get a simple question about the dutch auction but got a corprorate speak trust us response.  The new management team is starting to repeat the bad habits of the old.  If S wants to attract more instituonal investors they have to be more transparent about their cash flow projections.and why the forecasts are plausible. 

[rkhosla]

What was the question you asked?

[Ventoux]

FCF, which should be used to pay off the 8.5% notes of 2026 ASAP. I doubt the high yield bond market is going to forget the debt restructuring (a 50% haircut, plus a small PIK kicker thrown in) the noteholders were subject to, without a SINGLE concession made by the equity holders. Who in their right mind would lend money at par to Sherritt after the way they treated the last group of lenders

[Ernieandbert]

1) because S had far better counsel in goodmans than note holder did in Bennett Jones  2) S threatened note holders with lose it all as S is the only allowed owner of the assets or take a hair cut  3) note holder working group were weak and inexperienced in workouts 

[Contrarian333]

For another interesting reorg look at Reitman's recent use of creditor protection to reorganize.  In the end creditors (landlords and suppliers) took 50 cents on the $1.00 while shareholders were not impacted at all.  What's more, the monitor recommended that the creditors accept this proposal even though they acknowledged that in liquidation the creditors might have received

[Ventoux]

Yes, you had mentioned this a while back in response to my whining about the "consentual restructuring" at Sherritt and the potential new playbook for restructurimgs, capital structure hierarchy be damned. 

[Ventoux]

Thanks for your explanation. Conceptually I am having difficulty with point 2 in that had Sherritt  diluted the existing shareholders Sherritt still would have been the owner of the assets, had a cleaner balance sheet and would not have sullied it's reputation in the fixed income community. With the new information you have provided, you have made the case even stronger for the

[Ernieandbert]

Two issues:  there were American note holders that would have been new equity holders and they quite simply cannot own equity and more importantly S operates at the pleasure of the Cuban Gov't...they could have nixed any change in equity owenrship at any time they bloody well felt like.  That is my sense for what it is worth

[Ventoux]

The plot thickens as the fog clears. Thanks for the colour.