Sherritt seeks 3-yr extension on $720 million in debt to weather downturn

TORONTO – Sherritt International is asking note holders for a three-year extension on the repayment of $720 million in unsecured debt.

The Toronto-based mining company (TSX:S) says it now wants three groups of notes to mature in 2021, 2023 and 2025.

It currently faces a 2018 maturity for $220 million of notes, followed by $250 million in 2023 and $250 million in 2025.

Sherritt says a three-year delay would treat all noteholders fairly and provide greater financial stability as it weathers a period of weak commodity prices.

Sherritt says it has received support for the extension from noteholders representing 44 per cent of the total value of the outstanding notes but will require further approvals for the plan to be executed.

Typically, such a decision requires approvals from a two-thirds majority of each class of noteholders. A court will decide whether to treat all the Sherritt noteholders as a single class or more than one class.

The company is active in several resource industries, primarily in Madagascar and in Cuba.

In January, Sherritt announced a $1.6-billion writedown of the value of its stake in the Ambatovy nickel mining operation in Madagascar — a non-cash item recorded in its 2015 fourth quarter.

The company says it will continue to operate as usual as it works to get sufficient support for the debt extension. Sherritt has set a Sept. 15 as its decline for receiving support agreements.