Sherritt Announces Ratification of Payment Plan by Cuban Partners

Sherritt International release

TORONTO--(BUSINESS WIRE)-- Sherritt International Corporation (“Sherritt” or the “Corporation”) (TSX:S) today announced that its Cuban partners have formally ratified an overdue receivables agreement (the “Agreement”) for repayment of amounts owed to Sherritt from Energas S.A. (“Energas”) of US$150 million, and have made the first monthly payment of US$2.6 million to Sherritt in Canada in accordance with the terms of this Agreement. The overdue amounts from Energas relate to Sherritt’s power business in Cuba, and include a loan provided by Sherritt to fund the expansion of power production facilities at Boca de Jaruco.

“Ratification of the overdue receivables agreement by our Cuban partners is an important step in addressing our Cuban receivables issues.” said David Pathe, President and CEO of Sherritt International. “We would like to thank our Cuban partners and government officials for their efforts in ratifying the agreement in light of recent geopolitical developments that have impacted the country. We continue to work with our Cuban partners to try to ensure that current receivables are paid on a timely basis. Sherritt and our Moa Joint Venture (“Moa JV”) partner will be celebrating 25 years of collaboration later this year, and we look forward to ongoing cooperation, particularly as demand for Class 1 nickel and ethically-sourced cobalt continues to grow in response to surging demand for electric vehicle batteries.”

Under the terms of the Agreement, Sherritt will receive payments averaging US$2.5 million per month effective May 2019. The May payment of US$2.6 million was received by Sherritt today and a June payment is expected later this month. The monthly payments will be made by way of a currency exchange involving the Moa JV, which is focused on nickel and cobalt production in which Sherritt is a 50% partner, and Energas, a Cuban joint venture focused on electricity production in which Sherritt holds a one-third interest, with foreign currency that would be used by the Moa JV to pay for specified costs in Cuba instead being provided to Sherritt in exchange for local currency held by Energas.

The Agreement recognizes and acknowledges 100% of amounts owing to Sherritt. In addition, the Agreement provides that Sherritt will receive 100% of available distributions from the Moa JV once each partner has received a minimum amount of distributions. The minimum dividend threshold for 2019 is US$68 million (100% basis). The minimum dividend threshold for 2020 is currently under discussion and is expected to be finalized in Q4 2019.