Sherritt pursuing comprehensive recapitalisation to cope amid Cuba challenges
Embattled nickel and cobalt refiner Sherritt International Corporation has warned it is operating with constrained liquidity after it suspended its joint venture activities in Cuba and stopped its refinery operations in Alberta earlier this year, owing to US sanctions on Cuba.
Sherritt advises of material uncertainty surrounding its ability to continue as a going concern, however, the company remains in active discussions with its senior lenders and noteholders on a comprehensive recapitalisation that can help stabilise its balance sheet and restore normal operations when circumstances permit.
The capital required to restart its refinery in Alberta and its joint venture operation in Cuba has been further increased by elevated costs of key inputs such as sulphur - the price of which has risen to historic highs as a result of global supply restrictions.
"We require a significant amount of new capital to fund the restart and related working capital. We are pursuing a combination of government support, including from Gillon Capital, strategic and bridge financing, and other sources to meet our capital requirements," Sherritt confirms.
There can be no assurance that such financing will become available or be completed on acceptable terms.
Sherritt's shares resumed trading on TSX on July 13 after delays to its first-quarter financial statement filings. The company expects to release its second-quarter results on August 12.
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