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US investor group proposes recapitalizing Sherritt after Cuba halt
The proposal, submitted June 26, would provide immediate 12¢ per share equity funding with no third party debt-financing condition, after sanctions halted Sherritt’s Cuban operations in May.
A U.S. investor group led by Glencore has offered to recapitalize Sherritt International and acquire control of the beleaguered miner, whose survival is in doubt after its Cuban operations were suspended, according to Mining.com. The consortium, which also includes London-based Kyma Capital, Brevan Howard Asset Management co-founder Trifon Natsis, and an unidentified U.S. anchor investor, submitted its bid to Sherritt on June 26. The offer includes immediate equity funding at 12¢ a share without a third-party debt-financing condition, and eligible existing shareholders can invest at the same price as the consortium. Mining.com reports Sherritt faces an acute liquidity crunch after the halt of its Cuban joint venture in May due to sweeping U.S. sanctions, followed by the shutdown of its nickel and cobalt refinery in Fort Saskatchewan, Alberta. The group said it is asking the board to compare proposals and let the better transaction win, pointing to “constructive engagement already underway in Washington.”
Shares in Sherritt jumped 24% to 15¢ apiece in Toronto Monday morning, valuing the company at about $105 million (US$75 million), Mining.com said. The consortium said U.S. authorities, including the State Department and Treasury Department, do not object to it negotiating with Sherritt, and it would seek to stabilize the company’s capital structure and liquidity if a deal is completed.