* Sherritt to cut stake in Ambatovy project to 12 pct from
* Sumitomo's stake to rise to 47.7 pct, Kores' stake to 40.3
* Additional stakes are in exchange for debt relief
(Recasts with Sumitomo announcement, updates dateline)
May 2 Sumitomo Corp said on Tuesday it
and Korea Resources Corp (Kores) will get a larger
stake in the Ambatovy nickel project in Madagascar, as part of a
debt restructuring deal with partner Sherritt International Corp
Sherritt's stake in the project will be reduced to 12
percent from 40 percent in exchange for the elimination of C$1.4
billion ($1.02 billion) of debt owed to Sumitomo and Kores,
according to the revised joint venture agreement.
The revised terms "removes the largest area of uncertainty
for both Ambatovy and Sherritt," Sherritt Chief Executive David
Pathe said on Monday.
Sumitomo's stake will increase to 47.7 percent from 32.5
percent and Kores' share will climb to 40.3 percent from 27.5
percent, Sumitomo said.
Toronto-based Sherritt said it will remain the operator of
Ambatovy, which consists of a nickel-cobalt mine and processing
and refining facilities, until at least 2024.
The deal is expected to be finalized by the end of
September, a Sumitomo spokeswoman said.
Sumitomo's total exposure to the Ambatovy project was around
$1.7 billion, including about $600 million loans to Sherritt.
Sumitomo said in February nickel output at Ambatovy reached
42,100 tonnes in 2016, and was expected to rise to 48,000-52,000
tonnes this year.
But Sherritt said last month that Ambatovy nickel production
in the first quarter of this year was down 14 percent from a
year ago, and down 25 percent from the previous quarter.
($1 = 1.3660 Canadian dollars)
(Reporting by Nicole Mordant in VANCOUVER and Yuka Obayashi in
TOKYO; Editing by Leslie Adler, James Dalgleish and Randy Fabi)