JOHANNESBURG — After months of negotiations with its partners, Sherritt International Corp. is still considering a complete exit from its costly joint venture in Madagascar as it struggles to reduce its huge debt burden.
The Toronto-based company owns 40 per cent of the Ambatovy nickel and cobalt mine in Madagascar, which cost more than $5-billion (U.S.) to develop. Last year, it announced a $1.6-billion (Canadian) writedown of the value of its stake in the mine, where it is also the operator.
After borrowing about $650-million (U.S.) from its partners to pay for its share of developing the mine, Sherritt has seen this loan balloon to about $1.3-billion (Canadian) on its balance sheet as the interest compounded, according to David Pathe, Sherritt’s chief executive officer. “It’s an enormous debt number for a company our size,” Mr. Pathe said in an interview at an African mining conference in Cape Town.
Sherritt, which also has mining and energy projects in Cuba, announced its year-end results on Thursday evening, reporting a net loss of $378.9-million for the year ended Dec. 31. This was a reduction from a net loss of $2.1-billion in the previous year. The 2015 loss was largely due to the $1.6-billion Ambatovy writedown.
The company reported an adjusted net loss from continuing operations of $81.3-million in the fourth quarter of last year, compared to an adjusted net loss of $113.8-million from continuing operations in the same period of the previous year.
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