Sherritt offers 50% haircut for bonds in out-of-court recovery

Sherritt International, whose executives were once known as Fidel Castro’s favourite capitalists, proposed an out-of-court recovery plan that includes a reduction of 50% in the value of its bonds.

The Canadian miner, which has significant assets in Cuba, is offering to buy back as much as C$588-million of its debt at a big discount to face value. Bondholders will get 53c on the dollar plus accrued and unpaid interest if they accept by 5 p.m. New York time on March 27, or 50 cents plus interest if they wait.

The bondholders would get new second-lien notes with an 8.5% coupon.