A group of investors is extending support to Sherritt International Corp. as the company faces challenges due to U.S. sanctions against Cuba. The consortium, which comprises an undisclosed U.S. anchor investor, Kyma Capital Ltd., Trifon Natsis, and Glencore Ltd., has presented a non-binding recapitalization proposal to Sherritt’s board of directors in late June.
This proposal has been under consideration by the board since its submission, and the consortium is now making the announcement to allow the company’s stakeholders, shareholders, and employees to evaluate the available options. If the proposed agreement is approved, the consortium plans to collaborate with Sherritt to strengthen its financial structure and liquidity, focusing on maintaining and enhancing its Fort Saskatchewan, Alta., refinery, as well as its nickel and cobalt processing capabilities in North America.
Sherritt had recently disclosed the need for a substantial infusion of capital to support the reopening of its Alberta refinery and Cuban joint venture, which had been closed due to increased U.S. pressure on Cuba. The company is engaged in discussions with its senior lenders and noteholders to implement a recapitalization strategy aimed at stabilizing its financial position and resuming regular operations when circumstances allow.
Earlier, Sherritt had announced the suspension of operations at its Fort Saskatchewan refinery following the depletion of feed inventory from its Moa mine in Cuba. The company’s operations at the Moa joint venture in Cuba were also halted earlier this year, coinciding with fuel shortages in the country resulting from the U.S. embargo on Venezuelan oil access.
The move by the consortium to propose a recapitalization plan comes at a crucial juncture for Sherritt as it navigates the challenges posed by the geopolitical environment and seeks to secure its operational continuity and financial stability.