Sherritt and Partners Sign Definitive Agreement to Restructure Ambatovy Joint Venture
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Sherritt and Partners Sign Definitive Agreement to Restructure
Ambatovy Joint Venture
TORONTO, November 10, 2017 – Sherritt International Corporation (“Sherritt”) (TSX:S) today announced the signing
of a definitive agreement to restructure its Ambatovy Joint Venture with Sumitomo Corporation and Korea Resources
Corporation that will result in the transfer by Sherritt of a 28% interest in the Joint Venture and the elimination of
related debt from Sherritt’s balance sheet consistent with the previously announced agreement in principle.
“The signing of a definitive agreement to restructure our Ambatovy joint venture partnership represents a significant
milestone,” said David Pathe, President and CEO of Sherritt. “This agreement addresses our ’40 for 12’ issue and
eliminates the uncertainty caused by the Ambatovy non -recourse debt, while ensuring that we retain an ownership
stake in the world’s largest finished nickel laterite mine. Closing of the transaction will repres ent the culmination of
numerous discussions with our partners, bondholders, and other lenders over the past three years to preserve
liquidity, de-lever our balance sheet, extend the maturities of our outstanding public debt, and defer Ambatovy debt
repayment.”
Terms of the definitive agreement are consistent with the agreement in principle that Sherritt and its joint venture
partners announced in May 2017, and will result in, amongst other things, amendments to several agreements
governing the Ambatovy Joint Venture and related partner loans, as well as the Operating Agreement.
Highlights of the Definitive Agreement:
Sherritt will transfer 28% and retain a 12% ownership interest in the Ambatovy Joint Venture.
Sherritt will eliminate $1.3 billion (at September 30, 2017) in Ambatovy Joint Venture additional partner loans
from its balance sheet.
Sherritt will resume funding for its 12% interest retroactively to the end of 2015 and expects to pay
approximately US$35 million to fulfill non-funding to date, including accrued interest.
Sherritt’s outstanding partner loans of US$101 million due 2023 (at September 30, 2017) will continue to be
secured by Sherritt’s 12% interest.
The outstanding partner loans can be repaid in cash at any time through maturity in August
2023. Alternatively, at maturity Sherritt can: (i) elect to repay the loans in shares or a combination of cash
and shares at 105% of the amount then due, or ( ii) elect to repay in 10 equal semi -annual principal
installments (plus interest) com mencing in December 2024, at an interest rate of LIBOR +5% applied from
the original August 2023 maturity date.
Sherritt expects to make an additional payment of approximately US$13 million that will be placed into an
escrow account to cover potential fut ure funding requirements of the Ambatovy Joint Venture. Any amounts
remaining in escrow in August 2023 will be used to repay the outstanding partner loans, if any.
Sherritt will remain as Operator until at least 2024.
Sherritt will regain voting rights and certain other rights that were suspended when it ceased funding.
Sherritt will cover transaction and other closing costs, including financial and legal advisory fees, applicable
taxes and corporate restructuring costs.
Closing of the transaction remains subject to various conditions and third party consents. Sherritt expects final
closing of the transaction to occur before year-end 2017.
About Sherritt
Sherritt, which is celebrating its 90th anniversary in 2017, is the world leader in the mining and refining of nickel from
lateritic ores with projects and operations in Canada, Cuba and Madagascar. The Corporation is the largest
independent energy producer in Cuba, with extensive oil and power operations across the island. Sherritt licenses its
proprietary technologies and provides metallurgical services to mining and refining operations worldwide. The
Corporation’s common shares are listed on the Toronto Stock Exchange under the symbol “S”.
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For more information, please contact:
Joe Racanelli, Director of Investor Relations
Telephone: 416-935-2451
Toll-Free: 1-800-704-6698
Email: [email protected]
www.sherritt.com
Forward-Looking Statements
This press release contains certain forward-looking statements. Forward-looking statements can generally be
identified by the use of statements that include such words as “believe”, “expect”, “anticipate”, “intend”, “plan”,
“forecast”, “likely”, “may”, “will”, “could”, “should”, “suspect”, “outlook”, “projected”, “continue” or other similar words or
phrases. Specifically, forward-looking statements in this document include, but are not limited to, statements set out
in this press release relating to estimated costs and future funding requirements.
Forward-looking statements are not based on historic facts, but rather on current expectations, assumptions and
projections about future events, including matters relating to the transaction disclosed herein; availability of
governmental, regulatory and third party approvals; and the ability to achieve corporate objectives, goals and plans
for 2017. By their nature, forward-looking statements require the Corporation to make assumptions and are subject to
inherent risks and uncertainties. There is significant risk that predictions, forecasts, conclusions or projections will not
prove to be accurate, that those assumptions may not be correct and that actual results may differ materially from
such predictions, forecasts, conclusions or projections.
The Corporation cautions readers of this press release not to place undue reliance on any forward-looking statement
as a number of factors could cause actual future results, conditions, actions or events to differ materially from the
targets, expectations, estimates or intentions expressed in the forward-looking statements. These risks, uncertainties
and other factors include, but are not limited to the risks and uncertainties set out in the Management’s Discussion &
Analysis of the Corporation for the period ending March 31, 2017 and the Corporation’s Annual Information Form
dated March 28, 2017, each of which are available on SEDAR at www.sedar.com. Readers are cautioned that the
foregoing list of factors is not exhaustive and should be considered in conjunction with the risk factors described in
this press release and in the Corporation’s other documents filed with the Canadian securities authorities.
The Corporation may, from time to time, make oral forward-looking statements. The Corporation advises that the
above paragraph and the risk factors described in this press release and in the Corporation’s other documents filed
with the Canadian securities authorities should be read for a description of certain factors that could cause the actual
results of the Corporation to differ materially from those in the oral forward-looking statements. The forward-looking
information and statements contained in this press release are made as of the date hereof and the Corporation
undertakes no obligation to update publicly or revise any oral or written forward-looking information or statements,
whether as a result of new information, future events or otherwise, except as required by applicable securities laws.
The forward-looking information and statements contained herein are expressly qualified in their entirety by this
cautionary statement.