Sherritt International getting clobbered by President Trump’s tightened Cuba policies

Oh the sublime justice. Remember, Sherritt International, operates mining enterprises that were expropriated from American business interests in the early 1960s, and all their revenue derives from these Cuba “assets”. They are getting clobbered by President Trump’s policies. It’s less than they deserve.

By Paula Sambo and Danielle Bochove via Bloomberg:

Trump’s Cuba Gambit Pushes Canadian Miner Sherritt to the Brink

David Pathe Photographer: Kevin Van Paassen/Bloomberg

Sherritt International Corp., whose executives were once known as Fidel Castro’s favorite capitalists, is paying the price for its close ties to the struggling Caribbean nation.

The Canadian miner, which gets all its revenue from assets in Cuba, is being hit on multiple fronts by Donald Trump’s isolationism, plunging nickel prices and cost overruns. With the stock at 21 cents and its bonds trading at distressed levels, investors are starting to question the company’s viability.

“It all depends how the world unfolds in terms of commodity prices and the U.S.-Cuban relationship,” Chief Executive Officer David Pathe said in an interview this week. “There’s only so much that we can do right now and that’s focusing on the things that we can control.”

The Toronto-based miner is a shadow of what it once was. Long-known as a proxy for Cuba since former CEO Ian Delaney first engaged with Castro in the 1990s to develop the island’s nickel, oil and gas assets, Sherritt prospered as U.S. relations thawed over the past two decades and commodity prices soared.

Revenue jumped to almost C$2 billion ($1.5 billion) a decade ago, while the stock traded as high as C$18 in 2007. Since then, the stock has dropped 99 percent amid heightened country risk, a failed project in Madagascar, cost overruns and the collapse of the commodity super-cycle. The company’s bonds are trading at about 30 Canadian cents, according to multiple portfolio managers, implying low recovery in case of a default or debt overhaul.

“We have seen some bonds selling in the context of more aggressive U.S. policy towards Cuba, which has caused holders that have significant interests or operations in the U.S. to get out,” Pathe said. “That is what it is. From our perspective, we are focused on running our business as best we can.”

Sherritt’s debt costs are rising even as the company’s ability to generate cash flow to service that debt falls. Concerns about global growth have knocked the price of nickel down 24% over the last year, reducing the amount of cash Sherritt receives from markets outside Cuba. Meanwhile, a tightening of U.S. sanctions against Cuba this year has resulted in the island nation being unable to pay Sherritt for the energy it produces in foreign currency and has caused bondholders to sell the company’s debt.

“We have deliberately avoided having any presence in the U.S. since Helms-Burton came in 23 years ago,” said Pathe, who is barred from entering the country under a section of the act. Despite this, the company is being caught in the cross-fire as Trump punishes Cuba for its support of Venezuela, and takes aim at trading partners around the world.

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