Sherritt International Corp T.S

Cash or PIK on the January 31 interest payment?

[Ventoux1]

As at September 30, 2023  the outstanding principal amount of the PIK Notes was $63.4 million with the next interest payment on the PIK notes being January 31. Reverting  back to payment in kind would save just in excess of $6.8 million in cash  on an annual basis, in excess of 50% of the annual employee cost savings of $13 million expected to be realized that were announced on January 15. Desperate times call for desperate measures?

 

[FrozenInOntario]

Well, the payment of interest on the PIK was part of the initial plan of Sherrit delevering as it would add options to return some capital to investors.   Prior to this, they bought back a few time the PIK issued in lieu of cash at a 50% discount on the makret which was an astute way to handle the situation. Obviously, at current Nickel price, they have no capital now to return to

[YourFriendo]

Production...

[rkhosla]

i think they will pay cash... just to keep options open (though they don't have many).  reverting to payment in kind will really for me be an ominous sign of how desperate they are.... so hopefully they don't have to...