Sherritt's President and CEO David Pathe attends the company's AGM on Tuesday May 6, 2014.Chris Young
Sherritt International Corp. may not buy back a portion of its stock, the company's chief executive said on Wednesday, a move that would likely upset its vocal shareholders.
For more than a year, the nickel and energy producer has been under pressure from a small faction of shareholders to cut costs and to use its available cash to buy back some of its shares. The investors were livid that Sherritt was considering using some of the $1-billion (Canadian) from its coal sale to make a nickel acquisition.
The anger culminated in a proxy fight in May where Sherritt emerged victorious but vowed to do a better job of communicating with its shareholders.
The Toronto-headquartered company made good on promises to reduce costs and improve its balance sheet. The miner slashed 60 jobs across Canada and used about half the proceeds from its coal sale to reduce its debt.
This week, Sherritt launched a process to buy back up to 5 per cent of its stock. In an interview on Wednesday, however, the company's CEO said there was a possibility it might not happen.
"It will depend on how the share price performs and where the nickel price is and how confident we are feeling in our liquidity position," David Pathe said.
When asked how much Sherritt could spend on a share buyback, Mr. Pathe said, "I don't have any particular milestone in mind at which we would buy or not buy, or any milestone in mind in terms of how much we are looking to spend."
Mr. Pathe also repeated that making an acquisition was not a priority for Sherritt and that there was "nothing imminent at this point and time."
Sherritt is trading around $2.88 per share, its lowest level since 2009 when Wall Street's meltdown shattered investor confidence around the world.
The company reported a third-quarter loss compared with last year, due to depreciation at its new nickel mine in Madagascar.
Rachelle Younglai