Sherritt completes complex debt restructuring

October 10, 2014

Torys represented Sherritt with a team that included Michael Pickersgill, Adam Delean, Nina Mansoori, Yinka Olusoga, Morgan Crockett, Rory McGillis and Braden Jebson (corporate/securities), Jerald Wortsman and Catrina Card (tax).

On September 11, 2014, Sherritt International Corporation (Sherritt) announced offers to purchase for cash between C$100 million and C$150 million principal amount of its outstanding 8.00% senior unsecured debentures due November 15, 2018 (“2018 Debentures”) and between C$200 million and C$250 million principal amount of its outstanding 7.50% senior unsecured debentures due September 24, 2020 (“2020 Debentures”).

The minimum tender conditions for the offers were met on September 29, 2014 and the following day, Sherritt confirmed its intention to proceed in offering a principal amount of senior unsecured notes due 2022 (“2022 Notes”) on a private placement basis, conditional upon the completion of the consent solicitation and tender offers. The C$250 million private placement was priced on October 3, 2014, with a coupon of 7.875% per annum and an issue price of C$980 per C$1,000 principal amount.

The final results of the tender offers were announced on October 9, 2014 in which the principal amount of 2018 Debentures validly tendered was C$300.2 million and the principal amount of 2020 Debentures validly tendered was C$379.4 million. As the principal amounts of the debentures validly tendered exceeded the maximum purchase amounts for the offers, on closing Sherritt purchased C$150 million of the 2018 debentures tendered to the offer on a pro rata basis of approximately 49.97% and C$250 million of the 2020 debentures tendered to the offer on a pro rata basis of approximately 65.89%, using proceeds from the sale of its coal business on April 28, 2014.

On October 10, 2014, Sherritt announced the completion of its private placement of 2022 Notes, for net proceeds of C$239 million. Using the proceeds from the private placement, as well as cash on hand, Sherritt will redeem all of the C$275 million outstanding principal amount of its 7.75% senior unsecured debentures, due October 15, 2015. Sherritt has also amended and restated the indentures governing the remaining outstanding 2018 Debentures and 2020 Debentures, so that the covenants and certain other provisions of the debentures will be the same as the 2022 Notes.

Sherritt is a world leader in the mining and refining of nickel from lateritic ores with projects and operations in Canada, Cuba, and Madagascar.

Further information on the tender offers and private placement can be found on Sherritt’s website.

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