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Sherritt Announces Results of Modified Dutch Auction to Purchase Secured Notes and Fixed Price Tender Offer to Purchase Junior Notes

T.S

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Sherritt International Corporation (“Sherritt” or the “Corporation”) (TSX:S) announced today the results of its offers to purchase (i) its outstanding 8.50% senior second lien secured notes due 2026 (the “Secured Notes”) pursuant to a modified Dutch auction process (the “Secured Notes Dutch Auction”) and (ii) its outstanding 10.75% unsecured PIK option notes due 2029 (the “Junior Notes”, and collectively with the Secured Notes, the “Notes”) pursuant to a fixed price tender offer process (the “Junior Notes Fixed Price Tender Offer” and, together with the Secured Notes Dutch Auction, the “Offers” or the “Transaction”).

Having reviewed the positive results of the Offers, Sherritt has determined to not extend the expiration date for the Offers past the initial expiration date of June 1, 2022, and is concluding the Transaction at this time.

“We are pleased with the strong results of our notes purchase offers, which will reduce the aggregate principal amount of notes outstanding by almost $60 million and our annual interest expense by approximately $5.5 million, while at the same time providing near-term liquidity to our noteholders,” said Leon Binedell, President and CEO of Sherritt. “This transaction further demonstrates our focus on deleveraging our balance sheet and supports our sound framework for taking advantage of the strong nickel and cobalt market fundamentals. With this transaction and our steadfast focus on expanding production at our Moa Joint Venture we remain committed to generating value for all our stakeholders.”

The following table sets out the purchase price per $1,000 of principal amount of Notes, the aggregate purchase price and corresponding principal amount for each series of Notes to be purchased under the Offers.

Notes

CUSIP

Purchase Price
per $1,0001

Aggregate Purchase
Price

Corresponding
Principal Amount

Secured Notes

823901AM5

$850

$34,758,200

$40,892,000

Junior Notes

823901AN3

$550

$10,078,526

$18,324,593

Totals

N/A

$44,836,726

$59,216,593

  1. Includes the Initial Participation Consideration Amount (as defined in the Purchase Offer, defined below) of $30 per $1,000 of principal amount of Notes.

In addition, Sherritt will pay in cash to holders whose Secured Notes are purchased by Sherritt pursuant to the Secured Notes Dutch Auction the accrued and unpaid interest from the last interest payment date up to, but not including, the Payment Date (as defined below) in respect of such purchased Secured Notes.

The complete terms and conditions of the Offers were set forth in the Offer to Purchase dated May 11, 2022 (the “Purchase Offer”). All Junior Notes validly tendered and not withdrawn, and all Secured Notes validly tendered at or below the Clearing Price (as defined in the Purchase Offer) and not withdrawn, will be accepted for purchase by Sherritt subject to the terms and conditions set forth in the Purchaser Offer (including any applicable proration in respect of the Secured Notes). Payment for Notes accepted for purchase pursuant to the Offers will be made by Sherritt on the settlement date of June 6, 2022 (the “Payment Date”).

National Bank Financial Markets acted as dealer manager, Kingsdale Advisors acted as depositary and as information agent, and Goodmans LLP acted as Sherritt’s legal advisor in connection with the Transaction.

This news release does not constitute a notice of redemption under the redemption provisions of the indentures governing the Notes, nor does it constitute or form part of any offer or invitation to purchase or sell, or any solicitation of any offer to purchase or sell, the Notes or any other securities in any other country, nor shall it or any part of it, or the fact of its release, form the basis of, or be relied on or in connection with, any contract therefor.

About Sherritt

Sherritt is a world leader in using hydrometallurgical process to mine and refine nickel and cobalt – metals essential for an electric future. Its Technologies Group creates innovative, proprietary solutions for natural resource-based industries around the world to improve environmental performance and increase economic value. Sherritt has embarked on a multi-pronged growth strategy focused on expanding nickel and cobalt production by up to 20% from 2021 and extending the life of mine at Moa beyond 2040. The Corporation is also the largest independent energy producer in Cuba. Sherritt’s common shares are listed on the Toronto Stock Exchange under the symbol “S”.

Forward-Looking Statements

Certain statements and other information included in this press release constitute “forward-looking information” or “forward-looking statements” (collectively, “forward-looking statements”) under applicable securities laws (such statements are often accompanied by words such as “anticipate”, “forecast”, “expect”, “believe”, “may”, “will”, “should”, “estimate”, “intend” or other similar words). All statements in this press release, other than those relating to historical information, are forward-looking statements, including, but not limited to the amount of any Secured Notes and /or Junior Notes to be purchased under the Offers; the settlement date specified herein in regard to the Offers; and the payment of accrued and unpaid interest. Forward-looking statements in this press release are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from such forward-looking statements. The key risks and uncertainties are set forth in the Purchase Offer and in the Corporation’s reports filed with the Canadian securities regulatory authorities, including, without limitation, the “Risk Factors” section of the Annual Information Form of the Corporation dated March 24, 2022 for the year ended December 31, 2021 and the “Managing Risk” sections of the Corporation’s Management’s Discussion and Analysis for the first three months ended March 31, 2022 and the year ended December 31, 2021, all of which are available on SEDAR at www.sedar.com. As such, undue reliance should not be placed on these forward-looking statements.

The forward-looking information and statements contained in this press release are made as of the date hereof and the Corporation undertakes no obligation to update publicly or revise any oral or written forward-looking information or statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. The forward-looking information and statements contained herein are expressly qualified in their entirety by this cautionary statement.