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Sherritt tenders for up to C$50 million total of 8½%, 10¾% notes
By Wendy Van Sickle
Columbus, Ohio, May 11 – Sherritt International Corp. announced a Dutch auction tender offer to purchase its of outstanding 8½% senior second-lien notes due 2026 and a fixed-price tender offer to purchase its 10¾% unsecured PIK option notes due 2029, according to a news release.
The company is offering to purchase the notes for a total consideration of up to C$50 million. There is currently C$350.5 million of the 2026 notes (Cusip: 823901AM5) and C$87 million of the 2029 notes (Cusip: 823901AN3) outstanding.
The maximum cash consideration per C$1,000 principal amount of the 2026 notes is C$850, inclusive of a C$30 initial participation premium. Holders of those notes may specify either the minimum amount they are willing to receive for each C$1,000 principal amount or accept the clearing price determined by Sherritt.
The purchase price per C$1,000 principal amount of the 2029 notes is C$550, inclusive of a C$30 initial participation premium.
The initial premium will be paid only to holders who tender their notes by 5 p.m. ET on June 1, which is the initial expiration. Payment is expected to be made three business days thereafter.
The company will also pay accrued interest.
The 2029 notes will have acceptance priority over the 2026 notes.
The company may opt to have an extended expiration of 5 p.m. ET on June 15. Holders who tender their notes after the initial expiration will not be eligible for the C$30 initial participation premium.
Sherritt plans to fund the transaction using available cash.
“The principal purpose of the transaction is for Sherritt to reduce its outstanding debt and provide near-term liquidity to our noteholders,” Leon Binedell, president and chief executive officer of Sherritt, said in the release.
National Bank Financial Markets (416 869-8635 or NBF.CapitalMarkets@nbc.ca) is acting as dealer manager, and Kingsdale Advisors (800 749-9052 or contactus@kingsdaleadvisors.com) is acting as depositary and information agent.
Sherritt is a Toronto-based miner and refiner of natural resources.
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