Sherritt extends early deadline of offer for 8%, 7½%, 7 7/8% notes

By Wendy Van Sickle

Columbus, Ohio, June 13 – Sherritt International Corp. is extending to 5 p.m. ET on July 17 the early consent date of its consent bid for its 8% senior debentures due 2021, its 7½% senior debentures due 2023 and its 7 7/8% senior notes due 2025, the company said in a news release issued Monday.

Second-lien notes

As previously amended, the terms of the transaction include an increase in the principal amount of new 8½% second-lien notes to an amount equal to 54% of the principal amount of the existing notes to be exchanged plus the amount of accrued interest.

The final principal amount of new second-lien notes to be issued pursuant to the transaction will depend on the amount of interest accrued in respect of the existing notes up to the effective date. Based on an effective date of Aug. 31, the principal amount of new second-lien notes would be approximately C$357.6 million.

Also included in the amendments are some changes to the new second-lien notes, including moving up the maturity date to Nov. 30, 2026 from April 30, 2027, and providing that the redemption price in the event of an early redemption, a change-of-control put or on the maturity date will be 107% of par, provided that the total amount of all premium payments paid by Sherritt will not be less than C$25 million.

Junior notes

An additional C$75 million of new 10¾% junior notes due 2029 will be issued as additional consideration for the exchange for the existing notes. Each noteholder will be entitled to a pro rata share of the new junior notes.

Update on debtholder votes

As previously announced, the voting deadline for noteholders and holders of the corporation’s Ambatovy joint venture partner loans in respect of the corporation’s plan of arrangement has been extended to 5 p.m. ET on July 21. All debtholders will vote as one class in respect of the plan of arrangement at the meeting. The aggregate principal amount of debt held by all debtholders entitled to vote on the plan of arrangement as one class is approximately $733 million.

As at the end of Monday, approximately 87% of the votes cast by debtholders were cast in favor of the plan of arrangement. About $586 million of existing notes and Ambatovy joint venture partner loans have been voted in respect of the plan of arrangement at the end of Monday.

Support agreements

Sherritt announced previously that it has entered into support agreements with all of the holders of the about C$90 million of existing notes that had entered into confidentiality agreements with the corporation in connection with the transaction.

All of these supporting noteholders have agreed to vote in favor of Sherritt’s plan of arrangement under which the transaction is to be implemented in proceedings under the Canada Business Corporations Act.

This approximately C$90 million of existing notes held by the supporting noteholders are in addition to the approximately C$230 million of existing notes that had already been voted in favor of the plan of arrangement at April 7.

The company announced on March 6 that it is seeking approval from holders to approve its corporate plan of arrangement under the Canada Business Corporations Act.

Based in Toronto, Sherritt mines and refines nickel and cobalt with projects, operations and investments in Canada, Cuba and Madagascar.

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