TORONTO, July 18, 2026, 18:08 (EDT)
- Cuba’s national power grid collapsed three times within nine days. Local outages continued even after the grid was restored.
- Sherritt closed Friday at about C$0.14, putting its market value at C$95 million.
- On July 17, noteholders revealed competing emergency funding and recapitalisation proposals.
The recent power outage in Cuba has redirected the immediate Sherritt trade towards emergency support rather than nickel shipments. The mining company had previously halted direct operations in Cuba. Production at its Alberta refinery was also paused.
The latest outage increases restart expenses and raises asset-recovery risks. However, it is not a new stoppage at the Alberta facility, a difference that is important for valuation.
Toronto’s markets did not open on Saturday. Sherritt ended trading on Friday close to C$0.14, giving the company a valuation of roughly C$95 million. The wider TSX index fell 0.1% during the week.
This week, two shocks emerged for individual companies. On Monday, Sherritt cautioned that its liquidity was still tight and there was significant doubt about its ability to continue as a going concern. By Friday, a group of noteholders challenged the company’s description of its discussions with creditors.
Cuba’s national power grid suffered its third failure in nine days on Tuesday, cutting off electricity to around 10 million residents. The grid was restored on Wednesday morning, but subsequent local blackouts intensified.
Energy Minister Vicente de la O Levy pointed to a “total absence of fuel.” According to Jorge Piñon, an energy researcher at the University of Texas, key plants are “old, broken and tired.” The Guardian
Sherritt holds a 50% stake in the Moa nickel-cobalt venture and a one-third share in Energas. The company is the largest independent energy producer in Cuba. According to Sherritt, its operation in Alberta is the sole major cobalt refinery in North America.
The balance sheet highlights the increasing importance of financing terms.
| Sherritt balance-sheet item | C$ millions | Times July 17 market value* |
|---|---|---|
| July 17 equity market value | 95.0 | 1.0x |
| Secured-note principal plus facility used, March 31 | 328.0 | 3.5x |
| GNC receivable, fair value, March 31 | 237.9 | 2.5x |
| Canadian cash balance, March 31 | 10.9 | 0.1x |
| Cuban bank cash balance, March 31 | 109.2 | 1.1x |
Multiples are based on the July 17 market capitalization. Cuban bank deposits could not be freely converted due to limited foreign-currency reserves.
The outstanding debt principal was roughly 3.5 times the equity value as of Friday, while the GNC receivable was equivalent to 2.5 times that amount. However, the bulk of reported cash was held in Cuban banks and was not easily convertible. As a result, slight adjustments to recovery assumptions could cause significant shifts in shareholder value.
Sherritt reports it requires substantial new funding for restarts and to cover working capital needs. The previous term sheet from Gillon Capital outlined 55% ownership assuming full warrant exercise. Management anticipated a discount relative to the May 15 closing price. The offer is still non-binding and subject to government and regulatory clearances.
Investors holding Sherritt’s 9.25% 2031 notes stated there had been no substantial engagement. They revealed a separate recapitalisation plan and an emergency financing term sheet. The group said that delays risk increasing restart costs and total funding requirements.
The core issue for investors is the dispute. Sherritt’s earlier operating halts happened before the current blackout. The company’s equity now depends on dilution, approval from creditors, and the chances of recovering claims in Cuba. Nickel prices are secondary until a funded restart is seen as credible.
The TSX starts trading at 9:30 a.m. EDT on Monday. Sherritt is not expected to release results next week, with its second-quarter report due for filing after the close on August 12. Investors are monitoring for any unplanned updates on financing, creditors, and grid restoration.
Risks: Consistent fuel supplies and secured financing may help maintain the restart’s value. Any repayment request, further sanctions or an impairment on receivables could increase value for creditors.
