Go to the Globe and Mail homepage

Jump to main navigationJump to main content

The site of the Ambatovy nickel mine in Madagascar. (Geoffrey York/The Globe and Mail)
The site of the Ambatovy nickel mine in Madagascar. (Geoffrey York/The Globe and Mail)

Takota fund urges Sherritt share buyback, review of Ambatovy Add to ...

Investment fund Takota Asset Management issued an open letter Tuesday calling on the board of directors of Sherritt International Corp. to buy back shares and review the work at its Ambatovy project.

In the letter, Takota principal Scott Leckie said the value of buying back shares would be hard to beat for the company

“Because the management and the board intimately know the company’s assets, the risk to the capital invested in a share buyback is much less than for outside projects,” Mr. Leckie wrote.

“Furthermore, no costly incremental management time or effort is required to implement a share buyback plan.”

Mr. Leckie also called on the company to take a look at its troubled $5.5-billion Ambatovy nickel project that has been plagued with delays and increased costs that have driven its price tag hundreds of millions of dollars higher than originally estimated.

Takota did not disclose its stake in Sherritt other than to say it was an “important position” to the firm.

Sherritt, which holds a 40 per cent stake in Ambatovy, has cited a litany of problems during construction, including poor performance by contractors and inaccurate estimates on the project in the island country off the east coast of Africa.

Mr. Leckie said Tuesday the company should form a special committee to review the performance by its engineering contractor SNC-Lavalin Group Inc.

Sherritt produces nickel from operations in Canada, Cuba, Indonesia and Madagascar, an island off the east coast of Africa.

The company is also the largest producer of thermal coal in Canada and the largest independent energy producer in Cuba, with extensive oil and power operations across the island.

Report Typo/Error

Next story




Most popular videos »

More from The Globe and Mail

Most popular