Sherritt says exchange for 6% convertibles oversubscribed

New York, Dec. 4 - Sherritt International Corp. said its exchange offer for up to C$300 million of its 6% convertible unsecured subordinated debentures due Dec. 15, 2006 is oversubscribed.

By the expiration date of Dec. 3, holders had tendered C$485.989 million of the securities out of the C$600 million outstanding. As a result, the company will accept 61.73% of the securities tendered.

In exchange for the existing convertibles, Sherritt will issue an equal principal amount of new convertibles with a higher coupon, lower conversion price and a longer maturity. The new convertibles will carry a 7% coupon, mature on Dec. 15, 2013 and be convertible at a price of C$7.00 per restricted voting share. The existing securities convert at C$8.775 per restricted voting share.

"This highly successful offer will allow Sherritt to use its existing cash resources and projected operating cash flows to pursue a number of business opportunities designed to create long-term value for all stakeholders," said Ian Delaney, chairman of Sherritt, in a news release. "The exchange also better aligns the maturity of our debentures with our long-term growth strategy."

Dealer managers were National Bank Financial Inc., BMO Nesbitt Burns Inc., Griffiths McBurney & Partners, Paradigm Capital Inc., Peters & Co. Ltd. and Salman Partners Inc.

Sherritt is a Toronto-based natural resource company.

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