A group of investors has extended a potential lifeline to Sherritt International Corp. in light of U.S. sanctions affecting the Canadian mining company’s operations. The consortium, which includes an undisclosed U.S. anchor investor, Kyma Capital Ltd., Trifon Natsis, and Glencore Ltd., has presented a non-binding recapitalization proposal to Sherritt’s board of directors in late June.
The consortium has confirmed that the proposal has been under the board’s consideration since then. The announcement is made at this time to allow the company’s shareholders, employees, and other stakeholders to evaluate the available alternatives. If the proposed deal is approved, the consortium plans to collaborate with Sherritt to enhance its financial structure and liquidity. They aim to maintain and improve operations at the Fort Saskatchewan, Alberta refinery, as well as the North American nickel and cobalt processing capacity.
Sherritt previously disclosed the necessity for a substantial infusion of new capital to support the resumption of operations at its Alberta refinery and Cuban joint venture, which were halted due to heightened U.S. pressure on Cuba. The company has been in discussions with its senior lenders and noteholders to explore a recapitalization strategy aimed at stabilizing its financial position and reinstating regular activities when feasible.
The decision to suspend operations at the Fort Saskatchewan refinery was made after depleting the feed inventory supplied by the Moa mine in Cuba. Operations at Sherritt’s Moa joint venture in Cuba were halted earlier in the year due to fuel shortages in the country following the U.S. embargo on oil from Venezuela in January.