Sherritt Noteholders Approve Key Debt Transaction to Extend Maturities and Strengthen Capital Structure
Sherritt International Corporation, a leading producer of critical metals for the global energy transition, has announced a significant milestone in its financial restructuring efforts. At separate meetings held earlier today, the Corporation received strong support from its noteholders for its proposed transaction under the Canada Business Corporations Act (CBCA) to extend debt maturities and reinforce its capital structure.
The meetings brought together holders of Sherritt’s two primary categories of debt: its 8.50% senior second lien secured notes due November 30, 2026 (the “Senior Secured Notes”) and its 10.75% unsecured PIK (payment-in-kind) option notes due August 31, 2029 (the “Junior Notes”). Together, these debt instruments form a substantial portion of Sherritt’s financial obligations.
At the respective meetings, both groups of noteholders voted overwhelmingly in favor of the Corporation’s proposed CBCA plan of arrangement (the “CBCA Plan”), which outlines a transaction designed to provide Sherritt with greater financial flexibility, reduce refinancing risk, and support its long-term growth strategy. This initiative, previously announced by the company, is being implemented through a corporate arrangement under the CBCA and aims to address the upcoming maturities of its outstanding notes by pushing them further into the future.
Resounding Support from Noteholders
The approval of the CBCA Transaction marks a crucial step forward for Sherritt. According to the company, approximately 84% of the total principal amount of outstanding Senior Secured Notes were represented at the meeting of senior noteholders. Of those votes cast, an overwhelming 99.67% were in favor of the CBCA Plan. Similarly, around 80% of the total principal amount of Junior Notes participated in the junior noteholders’ meeting, with 93.75% of votes supporting the transaction.
The exceptionally high level of support from both groups of creditors indicates broad confidence in the proposed restructuring and the future direction of the company.
Court Approval Next Step in the Process
With noteholder approvals secured, Sherritt and its subsidiary, 16743714 Canada Inc. (together referred to as the “Applicants”), are preparing to seek approval of the CBCA Plan from the Ontario Superior Court of Justice (Commercial List). The court hearing is currently scheduled for 10:00 a.m. (Toronto time) on April 9, 2025. The Corporation anticipates a smooth legal process, given the high level of creditor support.
Pending court approval and the fulfillment (or waiver) of any remaining conditions, the CBCA Transaction is expected to be finalized shortly thereafter. Once implemented, the plan will be binding on all noteholders, aligning their interests and ensuring a coordinated path forward.
As part of the court proceedings, the Applicants will also seek a permanent waiver of any potential defaults that may have arisen due to the initiation of the CBCA process or the steps taken to implement the CBCA Plan. This waiver will help eliminate legal uncertainties and prevent disruptions to the Corporation’s operations or investor confidence.
Subsequent Exchange Transaction to Follow
In addition to the CBCA Plan, Sherritt intends to complete a “Subsequent Exchange Transaction,” as previously disclosed in the Corporation’s management information circular dated March 4, 2025, and a news release issued on March 21, 2025. This follow-up transaction will occur immediately after the implementation of the CBCA Plan, assuming all related conditions are met or waived.
The Subsequent Exchange Transaction is designed to further streamline Sherritt’s capital structure and provide additional long-term benefits. Full details of the exchange have been disclosed in the management information circular and supplementary materials filed with Canadian securities regulators.
Legal and Regulatory Considerations
Sherritt emphasized that this announcement and the transactions described herein do not constitute an offer to sell securities in the United States. The new securities to be issued pursuant to the CBCA Plan and the Subsequent Exchange Transaction will rely on the exemption from registration under Section 3(a)(10) of the U.S. Securities Act of 1933, along with similar exemptions under applicable state securities laws.
This ensures compliance with international securities regulations while allowing Sherritt to move forward efficiently with its restructuring efforts.
A Strategic Move for Long-Term Strength
The approval of the CBCA Transaction marks a strategic turning point for Sherritt, which has been steadily working to enhance its balance sheet in response to evolving market conditions and the demands of the global energy transition.
By extending debt maturities, the Corporation can focus more of its resources on growth initiatives, including the expansion of its core nickel and cobalt production assets. The decision also reflects a proactive approach to managing financial risk and positioning the company for continued resilience amid commodity price fluctuations and geopolitical challenges.
About Sherritt International Corporation
Sherritt is one of the world’s leading producers of high-purity nickel and cobalt, metals that are increasingly vital to clean energy technologies such as electric vehicle batteries and renewable energy storage systems.
The company operates primarily through the Moa Joint Venture in Cuba, which has a projected mine life of approximately 25 years. Sherritt is currently executing a growth initiative aimed at boosting mixed sulfide precipitate (MSP) production by 20%, thereby increasing output of contained nickel and cobalt. This expansion is seen as a vital step in responding to rising global demand for battery metals.
Sherritt also has a significant presence in the power generation sector through its ownership in Energas, the largest independent power producer in Cuba. Energas operates with an installed electrical generating capacity of 506 megawatts (MW), supplying roughly 10% of the country’s national power. The company utilizes combined-cycle power plants that run on Cuban natural gas—considered one of the lowest-carbon-emitting energy sources available in the country.
With a dual focus on mining and energy, Sherritt has carved out a unique position in the global resource sector. The Corporation’s hydrometallurgical processing expertise has also made it a recognized innovator, with a strong environmental and technical track record.
A Clear Path Forward
As global markets demand more ethically sourced and environmentally responsible materials, Sherritt is well-positioned to capitalize on these trends. The successful approval of the CBCA Transaction by its noteholders represents a major step in securing the financial foundation required to pursue this vision.
By addressing its near-term maturities and building a more sustainable capital structure, the Corporation is laying the groundwork for long-term value creation for all stakeholders—investors, employees, and communities alike.
