Sherritt to buy back C$50 million of 7% convertibles

By Angela McDaniels

Seattle, Oct. 24 - Sherritt International Corp. said it will repurchase C$50 million of its outstanding 7% convertible unsecured subordinated debentures due 2013 at a price of C$1,610 per C$1,000 principal amount plus accrued interest.

The company began a tender offer on Sept. 13 in order to buy back up to C$50 million of the notes ahead of the first call date on Dec. 16.

The offer was conducted by way of a Dutch auction, which expired on Monday. The auction elicited tenders from holders of C$121.5 million principal amount of debentures, according to a company news release.

Sherritt said it expects to purchase tendered debentures on a pro rata basis of 41.16% and will make the purchase on or about Thursday.

The Toronto coal producer said previously that the purchase price would not be less than C$1,470 and not more than C$1,610 for each C$1,000 principal amount of debentures. This price range represents a premium of up to 10% of the closing price of the debentures on Sept. 12.

Sherritt said that given its strong earnings and cash flow generation, it considers the repurchase to be an effective use of its cash while still providing itself with the flexibility to pursue growth opportunities.

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