Sherritt proposes rights offering

Terms of a rights offering, resulting from the restructuring of Sherritt (TSE) into two independent public companies, have been proposed.

The company has declared a dividend, in the form of transferable rights, to its shareholders. The rights entitle shareholders to buy exchange certificates issued by Sherritt, which are exchangeable into restructured voting shares of the newly created company, Sherritt International, at no extra cost.

The new company will control all of Sherritt’s Cuban interests, including its commodity cobalt and nickel business, oil and gas assets, tourism and agriculture investments, and metallurgical technology business.

Sherritt shareholders of record on Nov. 28 were to have received one transferable right for each share held. Each right, combined with $5, entitles the holder to subscribe for one exchange certificate on or before 4:30 p.m. on Dec. 19.

The rights, however, will not be issued to most U.S. citizens, nor will subscriptions for purchase certificates be accepted from them. Neither the rights nor the certificates have been registered under the U.S. Securities Act, and, subsequently, may not be offered in that country. The rights and certificates have been given conditional approval for listing and trading on the Toronto Stock Exchange.

The rights granted to U.S. citizens will, instead, be delivered to a trust company, which will attempt to sell them. Proceeds of the sale will then be forwarded to U.S. citizens.