Embattled nickel and cobalt refiner Sherritt International Corporation has confirmed receipt of an unsolicited, non-binding proposal from a consortium comprised of Kyma Capital, Glencore and a US anchor investor on the company's recapitalisation amid operational and financial challenges stemming from US sanctions in Cuba.

Sherritt uses a world-leading hydrometallurgical process to mine and refine nickel and cobalt, with the company operating a refinery in Alberta and a joint venture mine in Cuba.

Sherritt says it will address all proposals from current or potential stakeholders and its board will consider them accordingly.

London-based investment manager Kyma Capital is currently Sherritt's largest economic stakeholder across its capital structure. In turn, while Glencore does not currently hold a legacy equity stake in Sherritt, it is part of the investor consortium that is proposing a rescue and recapitalization deal aiming to acquire at least a 55% controlling stake in Sherritt.

The recapitalisation proposal suggests fresh equity funding at C$0.12 per share, with participation rights allowing eligible existing shareholders to buy new stock at the same price. The consortium also submitted a strategic plan to strengthen Sherritt's North American nickel and cobalt platform.

The consortium says the proposal offers immediate, market-priced capital and brings real operating capability relevant to Sherritt's business. It is backed by participants with experience in mining, metals, commodity markets, critical minerals and global industrial operations.

Sherritt has also been considering a warrant structure transaction with Gillon Capital as a recapitalisation effort, however, the consortium believes this deal would give Gillon Capital the right to acquire control of the company at a later date and, owing to it being priced at a discount to the company's share price, the deal would result in substantial dilution to existing shareholders upon exercise.

The consortium has provided Sherritt with an emergency financing term sheet intended to address near-term liquidity needs and preserve operational flexibility while a broader recapitalisation is pursued.