Sherritt Receives Final Court Approval for CBCA Plan to Restructure Debt and Strengthen Capital Position
Sherritt International Corporation, a Canadian resource company recognized for its leadership in hydrometallurgical mining and refining of nickel and cobalt, has achieved a key milestone in its financial restructuring efforts. The company announced it has obtained a final order from the Ontario Superior Court of Justice (Commercial List) approving its proposed plan of arrangement under the Canada Business Corporations Act (CBCA). This approval clears the way for Sherritt to proceed with a significant transaction aimed at extending the maturities of its outstanding debt obligations and bolstering its long-term capital structure.
A Strategic Step in Financial Resilience
The court’s final order comes in relation to the company’s previously announced CBCA transaction—a comprehensive plan designed to provide Sherritt with greater financial flexibility by extending the maturity profile of its debt. This transaction is part of a broader strategic initiative to enhance the company’s balance sheet and better position it to capitalize on opportunities tied to the global energy transition.
The approved plan of arrangement (referred to as the “CBCA Plan”) will apply to all holders of the company’s outstanding senior and junior notes. Specifically, this includes the 8.50% senior second lien secured notes due 2026 (the “Senior Secured Notes”) and the 10.75% unsecured PIK option notes due 2029 (the “Junior Notes”). Collectively, the holders of these instruments are referred to as the “Noteholders.”
On April 4, 2025, both classes of Noteholders voted overwhelmingly in favor of the CBCA Plan during separate meetings. The final court approval affirms this support and enables the company to proceed with implementation, subject to the satisfaction or waiver of any remaining conditions.
Upcoming Steps and Implementation Timeline
According to Sherritt, the transaction will be completed as soon as reasonably practicable, following the fulfillment of all other necessary conditions. Once implemented, the CBCA Plan will become binding on the company and all Noteholders, regardless of how individual holders voted, ensuring a uniform and legally enforceable outcome across the capital structure.
The company also reiterated its intention to execute a related follow-on transaction immediately after the CBCA Plan is implemented. Known as the “Subsequent Exchange Transaction,” this step—outlined in detail in the management information circular dated March 4, 2025—is contingent on the successful completion of the CBCA Plan.
The Toronto Stock Exchange has conditionally approved the listing of up to an additional 99 million common shares of Sherritt in connection with the Subsequent Exchange Transaction. These shares will be issued to eligible participants as part of the restructuring process.
Legal and Regulatory Considerations
It’s important to note that this press release does not constitute an offer to sell securities in the United States. The securities to be issued under the CBCA Transaction are being offered in reliance on the exemption from registration provided by Section 3(a)(10) of the U.S. Securities Act of 1933 and similar provisions under applicable state securities laws. This exemption allows securities to be exchanged without formal registration when the exchange is approved by a court as fair and reasonable to all parties.
Strengthening a Core Industry Player
Founded on a legacy of innovation, Sherritt is a global leader in nickel and cobalt production using environmentally sustainable hydrometallurgical processes. These critical metals are essential components in the growing electric vehicle (EV) sector and broader energy transition initiatives.
Sherritt’s principal operation, the Moa Joint Venture, has an estimated mine life of approximately 25 years. The company is currently executing an expansion strategy aimed at increasing annual Mixed Sulphide Precipitate (MSP) production by 20%, boosting output of both nickel and cobalt. This expansion is expected to enhance the joint venture’s contribution to Sherritt’s overall profitability while supporting global efforts to secure critical mineral supply chains.
Beyond mining, Sherritt also operates in the energy sector through its ownership stake in Energas, the largest independent power producer in Cuba. Energas owns and operates two combined cycle power plants with a total generating capacity of 506 megawatts (MW), supplying roughly 10% of Cuba’s national electricity. The plants use natural gas, one of the lowest carbon-emitting fossil fuels, to generate low-cost, reliable power for the country.
As with any major financial restructuring, the CBCA Transaction is accompanied by a number of forward-looking statements and potential risks. Sherritt has advised stakeholders that such statements are based on current assumptions and expectations regarding future events and financial performance. These include projections related to the timing and impact of the CBCA Plan and Subsequent Exchange Transaction, anticipated improvements in capital structure, and the company’s ability to reduce its debt burden and associated interest costs.
Forward-looking statements can often be identified by terms like “expect,” “intend,” “forecast,” “likely,” “may,” “will,” and similar expressions. However, such projections are inherently uncertain and subject to a range of risks that could cause actual outcomes to differ materially from those anticipated.
Among the many risks cited by the company are the possibility of delays or complications in completing the transactions, failure to secure all required approvals, and operational risks stemming from the company’s continued restructuring efforts. Additionally, Sherritt faces broader market and geopolitical risks, particularly related to its operations in Cuba, where political and regulatory dynamics—including U.S. sanctions and the Helms-Burton Act—could affect future performance.
The company also highlighted commodity market volatility, especially for nickel, cobalt, and fertilizer products, as well as broader macroeconomic uncertainties such as fluctuating interest rates, inflation, foreign exchange volatility, and supply chain disruptions. Sherritt’s ability to navigate these challenges will be critical to delivering the intended benefits of its financial restructuring.
A Critical Juncture for Growth and Stability
The final court approval of the CBCA Plan marks a pivotal moment in Sherritt’s ongoing journey to secure long-term financial resilience. With a strengthened capital structure, extended debt maturities, and an expansion-focused growth strategy, the company is taking decisive steps to ensure it remains a competitive and sustainable force in the critical minerals and energy sectors.
In an era where the global energy transition demands secure and ethical sourcing of battery metals like nickel and cobalt, Sherritt’s leadership and long-standing expertise in sustainable refining methods set it apart. As the company moves forward with the implementation of its restructuring plan and prepares for the next phase of growth, stakeholders will be watching closely to see how effectively Sherritt can execute on its operational goals and strategic vision.
For more information about Sherritt’s CBCA Transaction, capital restructuring initiatives, or upcoming milestones, investors are encouraged to consult the company’s public filings available on SEDAR+ at www.sedarplus.ca.
