Sherritt rejects bid for early board vote amid Trump ally talks

Sherritt International Corp. rebuffed its largest investor’s request for a special meeting to let shareholders vote on replacing its chairman and another board director, as the company faces scrutiny over its discussions with an ally of US President Donald Trump.

The Toronto-based miner said Friday the request was ineffective under Canadian law because it had already called its annual meeting. Even so, Sherritt said it will put Kyma Capital Ltd.’s proposals to shareholders at its Dec. 15 annual meeting.

Kyma, which owns about one-third of Sherritt’s outstanding notes and about 15% of its shares, last week said it would requisition a special shareholder meeting to seek the removal of Chairman Peter Hancock and another director, arguing the company needs new leadership. The London-based investor said it would propose its own nominees upon delivery of the requisition, according to the statement.

Sherritt last month entered into an exclusivity agreement with Gillon Capital LLC to consider a proposal that would give the Texas-based family office of former Trump adviser Ray Washburne a controlling stake in the Canadian miner. 

Kyma said the company deliberately scheduled its annual meeting for December, preventing shareholders from ousting directors before exclusive talks with Gillon Capital are due to expire on Oct. 12.

“A meeting scheduled after exclusivity expires is not accountability. It is choreography,” Kyma’s Chief Investment Officer Akshay Shah said in last week’s statement. “Well-governed and well-advised boards that are seeking to act in the best interests of all stakeholders do not behave in this way.”

One of Cuba’s largest foreign investors, Sherritt said it was in talks with Gillon Capital just days after announcing in May it would seek to dissolve its nickel mining joint venture on the island due to the US administration’s expanded sanctions against the communist state. 

Sherritt had already been under pressure for months after the US imposed a near-total fuel blockade on Cuba in January. Facing a fuel shortage, Sherritt halted production at its nickel and cobalt mine in eastern Cuba in February.

The troubled miner’s talks with Gillon Capital have drawn scrutiny from a group of bondholders, which earlier this month proposed an alternative recapitalization plan.

Last month, the company warned its ability to continue as a going concern was in doubt because of Trump’s sanctions order, saying it wouldn’t have enough cash to repay debt if lenders declared a default and demanded early repayment.

(By Sybilla Gross)