THERMAL COAL ACQUISITION – Sherritt offers to buy 100% of Royal Utilities

TORONTO - SHERRITT INTERNATIONAL CORP. announced on Mar. 18 an offer to purchase all of the issued and outstanding ...
TORONTO - SHERRITT INTERNATIONAL CORP. announced on Mar. 18 an offer to purchase all of the issued and outstanding ROYAL UTILITIES trust units that it does not already own. Sherritt and the ONTARIO TEACHERS' PENSION PLAN each own and control approximately 41.2% of the Royal Utilities Income Fund. The rest of the units are widely held.

Under the proposed transaction, Royal Utilities unit-holders would receive $12.25 per unit, consisting of cash, 0.8033 of a Sherritt common share, or a combination of cash and Sherritt common shares, subject to a maximum of $225 million to be paid in cash. This values the units at a 15.5% premium to the 20-day volume weighted average unit price. Assuming the full amount of cash is paid, the aggregate number of common shares issued by Sherritt would be approximately 31.4 million.

Teachers' and Sherritt have entered into a lock-up agreement pursuant to which Teachers' has agreed to tender all of its units to the proposed transaction.

Sherritt management believes that this proposed transaction is an important step in Sherritt's growth strategy as a premier, growth-oriented natural resource company. Acquiring 100% of Royal Utilities will internalize significant cash flow which will allow Sherritt to invest in growth projects in its coal and other segments.
Sherritt is a proven operating company involved in nickel, cobalt, oil and coal, with combined revenues of $1,845 million and combined EBITDA of $893 million in 2007. For a summary of the company's activities, see the February 2008 issue of Canadian Mining Journal.

Sherritt has also entered into an agreement with a syndicate of underwriters for the purchase by the underwriters of 26.25 million common shares of Sherritt at a price of $15.25 per common share, for total gross proceeds of approximately $400 million. The offering is expected to close around March 31, 2008. Net proceeds will be used for general corporate purposes and growth capital expenditures in Canada and Madagascar.

For an archival webcast of a presentation about this offer, visit


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