Sherritt bids for oil firm to ensure refinery’s fuel supply

In a bid to secure long-term fuel supplies for its Alberta nickel refinery, Sherritt Gordon (TSE) has signed a letter of intent to acquire all the outstanding shares of Canada Northwest Energy Ltd.

Under the proposal, shareholders of Canada Northwest, which has producing oil and gas fields in Alberta and holdings in Spain and Italy, are being offered the choice between common shares of Sherritt and Sherritt zero coupon notes on the following basis:

— For each common share of Canada Northwest, either 0.0516 common shares of Sherritt or $2.326 face amount of Sherritt notes;

— For the series A, B, C and D preferred shares of Canada Northwest, either 38.71 common shares of Sherritt or $1,744.90 face amount of Sherritt notes for each $1,000 stated value of preferred shares (or, in the case of the series D preferred shares, for each $1,000 of redemption value;

— For each $1,000 principal amount of 8% convertible subordinated debentures of Canada Northwest, either 101.548 common shares of Sherritt or $4,577.45 face amount of Sherritt notes.

Valued at $82 million, or $7.75 per common share, the transaction is designed to fuel Sherritt’s fertilizer and nickel operations which consume more than 80 million cubic ft. per day of natural gas.

While the acquisition is still subject to regulatory approval, TransAlta Resources Investment Corp. is lending its support by agreeing to tender its 40% stake in Canada Northwest to Sherritt.

Under the proposal, if the amount of notes chosen by Canada Northwest shareholders exceeds $50 million, the additional amount will be pro-rated down and security holders will receive additional Sherritt shares.

Print

 

Republish this article

Be the first to comment on "Sherritt bids for oil firm to ensure refinery’s fuel supply"

Leave a comment

Your email address will not be published.


*


By continuing to browse you agree to our use of cookies. To learn more, click more information

Dear user, please be aware that we use cookies to help users navigate our website content and to help us understand how we can improve the user experience. If you have ideas for how we can improve our services, we’d love to hear from you. Click here to email us. By continuing to browse you agree to our use of cookies. Please see our Privacy & Cookie Usage Policy to learn more.

Close