Sherritt International Corporation Updates Noteholder Support for CBCA Transaction
On March 29, 2025, Sherritt International Corporation (TSX: S) provided an update regarding the support from its noteholders for a significant corporate restructuring plan aimed at extending the maturities of its note obligations and fortifying its capital structure. This initiative, referred to as the CBCA Transaction, is set to be executed under a corporate plan of arrangement as outlined in the Canada Business Corporations Act.
1. High Level of Noteholder Support
As of the latest update, Sherritt reported that an impressive 99.99% of votes cast by holders of the Corporation’s 8.50% senior second lien secured notes, totaling approximately $185.7 million, are in favor of the CBCA Plan. Additionally, 94.52% of votes from holders of the 10.75% unsecured PIK option notes due August 31, 2029, representing about $52.8 million, have also supported the plan. These results reflect a strong endorsement from both Senior Secured Noteholders and Junior Noteholders alike.
It's important to note that these figures are interim and do not account for any additional votes that may be submitted before the Voting Deadline of April 2, 2025, at 5:00 p.m. Toronto time.
2. Upcoming Noteholders' Meetings
Sherritt has scheduled meetings for both Senior Secured Noteholders and Junior Noteholders on April 4, 2025. The meetings will take place at the offices of Goodmans LLP in Toronto, starting at 10:00 a.m. for Senior Secured Noteholders and 10:30 a.m. for Junior Noteholders. These meetings are crucial as they will involve voting on resolutions to approve the CBCA Plan.
The corporation has been granted an Interim Order from the Ontario Superior Court of Justice, allowing it to request that all Noteholders be treated as a single class for voting purposes on the CBCA Plan.
3. Importance of the CBCA Transaction
The CBCA Transaction is not merely a restructuring effort; it is a strategic initiative designed to extend debt maturities and reduce annual interest payments, thus enhancing Sherritt's financial stability. By implementing this plan, Sherritt aims to improve its overall capital structure, which is particularly vital given the current economic conditions and the company's operational focus on nickel and cobalt mining—metals critical for the energy transition.
4. Guidance for Noteholders
Sherritt has advised Noteholders to be mindful of potential earlier deadlines set by banks, brokers, or other intermediaries that hold Existing Notes on their behalf. Noteholders are encouraged to connect directly with their Intermediaries to confirm any internal requirements for submitting voting instructions.
5. About Sherritt International Corporation
Sherritt is recognized as a global leader in hydrometallurgical processes for mining and refining nickel and cobalt. With the Moa Joint Venture projected to have a mine life of approximately 25 years, Sherritt is actively pursuing an expansion program aimed at increasing its annual production of contained nickel and cobalt by 20%. Moreover, the company's Power Division is the largest independent energy producer in Cuba, contributing significantly to the national electrical generating capacity.
Sherritt’s strong performance and strategic initiatives highlight its commitment to sustainability and its role in the energy transition, particularly as global demand for electric vehicles and renewable energy solutions continues to rise.
6. Conclusion
The overwhelming support from Noteholders for the CBCA Transaction positions Sherritt International Corporation for a more robust financial future. As the company moves towards the upcoming meetings and final approvals, stakeholders remain optimistic about its potential to navigate through the complexities of the current market landscape effectively.
