Sherritt International Corporation (S) Earnings Call Transcript & Summary

Good morning. I would like to welcome all of you to the Special Meeting of Shareholders of Sherritt International Corporation. My name is David Pathe, and I'm the President and Chief Executive Officer of Sherritt. Pursuant to the interim order granted by the Ontario Superior Court of Justice on February 26, 2020, as amended by the amending order dated March 23, 2020, I will act as Chair of the meeting and administer these proceedings. Ward Sellers, Sherritt's Senior Vice President, General Counsel and Corporate Secretary, will act as Secretary of the meeting. Today's meeting is being held virtually as a result of the impact of COVID-19, the related advisories and recommendations of the Federal and Provincial governments, and the need to ensure the health and welfare of our security holders, employees and other stakeholders. Registered shareholders received a control number on their proxy form, and shareholders who have validly appointed their own proxy holder to vote at this virtual meeting by following the proxy appointment process were given a control number by the transfer agent. These control numbers will act as your login credentials for this meeting for voting purposes. The procedure for voting will be discussed shortly. All others attending as guests are able to listen and submit written questions, but they're not able to vote at this meeting. As previously communicated by Sherritt, in connection with our key strategic priority of maintaining financial strength and liquidity, Sherritt has, for a significant period of time, been reviewing and evaluating potential options and alternatives to strengthen our capital structure, improve liquidity and maximize value for all our stakeholders. Following Sherritt's detailed review process and careful consideration of various potential strategic alternatives, Sherritt determined to proceed with this proposed transaction announced on February 26, and described in detail in Sherritt's Management Information Circular dated March 6, 2020. Following announcement of the proposed transaction, Sherritt continued to engage in discussions with key stakeholders to continue to work towards a consensual transaction for the benefit of all of our stakeholders. On June 10, 2020, and July 17, 2020, Sherritt announced certain amendments to the proposed transaction, the details of which are set out in Sherritt's press releases dated June 10, 2020, June 29, 2020, and July 17, 2020, and the related material change reports. Sherritt believes that based on its available options and alternatives, the transaction is the best available alternative for Sherritt and its stakeholders at this time, it is fair and reasonable to all stakeholders and treats affected parties in a fair and balanced way considering all the current circumstances. The transaction was approved at the debt holders' meeting held today at 10 a.m. We are thankful to our stakeholders for supporting this important transaction and look forward to moving forward with Sherritt's ongoing efforts to improve our financial and operational stability and to improve stakeholder value from a stronger financial platform. Today's special meeting of shareholders is being held to consider and vote on those specific matters set forth in the stated capital reduction resolution in Appendix B to the Management Information Circular previously mailed to the company's shareholders of record as of March 6, 2020, being the reduction of the stated capital account of Sherritt's common shares to 575 million without any payment thereon. The stated capital reduction is a preliminary step to the implementation of the transaction and requires the approval from our shareholders. The stated capital reduction will not impact Sherritt -- impact the corporation's current number of common shares issued and outstanding. I now call the formal part of the meeting to order. With the consent of the meeting, I appoint Radha Mulchan-Singh and Carol Pineda, representatives of AST Trust Company Canada, to act the scrutineer of the meeting. I have received a declaration as to the distribution of the notice of special meeting of shareholders, a copy of the Management Information Circular and proxy form or voting information as applicable to all shareholders of record as of the close of business on March 6, 2020, record date of this meeting. This declaration will be filed with the minutes of the meeting. I have also received a preliminary report on attendance on the scrutineer, which indicates that we have a quorum for the meeting. I hereby declare that there is a quorum of shareholders present at the meeting. Notice having been mailed in accordance with the interim order granted by the Ontario Superior Court of Justice on February 26, 2020, as amended, and a quorum being present, I declare that this meeting is duly constituted for the transaction of business. A final report regarding attendance will be prepared by the scrutineer after the conclusion of the meeting and will be annexed to the minutes of the meeting. We will conduct the votes on this matter -- on matters considered at the meeting by online ballot. As explained earlier, registered shareholders received a control number on their proxy form, and shareholders who have validly appointed their own proxy holder to vote at this meeting rather than voting in advance of this meeting by proxy by following the proxy appointment process were required to obtain a control number prior to the meeting from Sherritt's transfer agent. These control numbers are required in order to vote at this meeting. If you did not receive a control number, you will not be able to vote at this meeting and are only able to attend as a guest. Voting is open and will close when indicated by me at the end of the formal part of this meeting. Participants will have been presented with voting buttons on the Lumi platform. By clicking on the voting button, participants will see the single stated capital reduction resolution we will be voting on today, together with the for and against voting options. Please cast your vote properly, and you should be presented with a Vote Received message to confirm your ballot has been cast. When the resolution is brought forward, we will open up the meeting for discussion on the resolution, which will be done by way of submitting online questions to the Chair of the meeting. [Operator Instructions] Please note that all questions are moderated before going to the Chair in order to eliminate repeated questions and to assure a normal meeting protocol for appropriateness is applied. As your question may be similar in nature to that of another participant, please be aware that the question may be presented to the meeting in a more generic format. Any questions that are unrelated to the motion before the meeting or out of order will not be addressed by the Chair. We will now move to the formal business of the meeting, which is to consider, and if deemed advisable, to pass the resolution of the shareholders to approve the reduction of stated capital in respect of the common shares of Sherritt to 575 million as set out in Appendix B to the Management Information Circular. Pursuant to the interim order, the shareholders stated capital reduction resolution requires approval by at least 66.6667% of the votes cast by shareholders present in person or represented by proxy and entitled to vote at the shareholders meeting. I move that the special resolution to reduce the stated capital in respect of the common shares of Sherritt to 575 million as attached to the Management Information Circular as Appendix B be approved. Can I have someone second the motion?

My name is Andrew Snowden, and I second the motion.

As previously mentioned, voting is open and will close when indicated. The motion is now also open for discussion. [Operator Instructions] As a reminder, those shareholders and proxy holders with control numbers, please vote now by clicking on the voting buttons. Registered shareholders who have voted in advance of this meeting do not need to resubmit their votes. We will leave voting open for another minute to get parties time to cast their ballots. [Voting]

The voting is now closed. I confirm that the stated capital reduction resolution has been approved by the required majority of votes cast at this meeting, and I declare that the stated capital reduction resolution has been approved. The final scrutineers' report will be incorporated into the minutes of the meeting. If any shareholder or proxy holder is interested in the exact number of votes cast in favor or against the matters decided at this meeting, he or she may obtain particulars after the meeting from the Secretary. The report on voting results will be filed on SEDAR after the meeting. This concludes the business of the meeting. If there are no other matters before the meeting, I will declare that the meeting is terminated. Thank you all for attending today. I declare that the meeting is terminated.