Sherritt Updates On Non-binding Term Sheet Entered Into With Gillon Capital Regarding a Proposed Private Placement

FINWIRES Analysis

At C$0.12 a share, Sherritt is a deeply distressed name where the proposed private placement is effectively a survival lifeline, and the heavy emphasis on OFAC and Cuba-related sanctions complexity explains why the deal remains non-binding. The 120-day exclusivity plus a new Kyma-nominated director suggests creditors and key holders are steering a restructuring rather than passive financing. The unusual U.S. Treasury approval requirement is the single biggest gating risk to completion.

Key Takeaways

Distressed equity; placement is a survival lifeline

OFAC and Cuba sanctions are key completion risk

Kyma-nominated director signals creditor-led restructuring

Sherritt International Corporation (S.TO) on Monday provided an update on the non-binding term sheet entered into with Gillon Capital, LLC regarding a proposed private placement, as previously disclosed.

The company also announced the appointment of Tabrez Khan as an independent director effective June 12, 2026, "bringing deep M&A, financial and strategic advisory experience" to the board. Tabrez Khan was nominated to the Board by Kyma Capital Opportunities Master Fund Limited, pursuant to Kyma's nomination right under the investor rights agreement dated as of April 22, 2025 between the corporation and Kyma.

In connection with the term sheet, Sherritt said it has entered into an exclusivity agreement with Gillon Capital providing for a 120-day period of exclusive negotiations with respect to the private placement. The period of exclusivity was entered into to allow the parties to complete their respective due diligence reviews and negotiate a definitive agreement with respect to the private placement, it added.

"Since the announcement of the Term Sheet, the parties have each engaged financial, legal and other advisors and are working collaboratively to navigate the legal, regulatory and commercial complexities identified through the due diligence process to date, including matters arising from the Corporation's operations in Cuba and the U.S. regulatory and sanctions environment. The parties continue to engage constructively with relevant governmental and regulatory authorities, as well as other stakeholders, in furtherance of these matters," Sherritt said in a statement

"The Private Placement remains subject to the execution of definitive documentation, satisfaction of customary conditions, the approval of the U.S. Department of the Treasury's Office of Foreign Assets Control, and the receipt of all required regulatory approvals, including the approval of the Toronto Stock Exchange. There can be no assurance that these complexities," it added.

Shares in Sherritt were unchanged at $0.12 on the TSX last Friday.

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