Securities Law & Instruments

Headnote

Mutual Reliance Review System for ExemptiveRelief Applications - Issuer has only one security holder -issuer deemed to have ceased being a reporting issuer.

Applicable Ontario Statutory Provisions

Securities Act, R.S.O. 1990, c. S.5, as am.s. 83.

IN THE MATTER OF

THE SECURITIES LEGISLATIONOF

ALBERTA, SASKATCHEWAN, ONTARIO,QUÉBEC,

NOVA SCOTIA AND NEWFOUNDLANDAND LABRADOR

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

SHERRITT POWER CORPORATION

 

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatoryauthority or regulator (the Decision Maker) in each of Alberta,Saskatchewan, Ontario, Québec, Nova Scotia and Newfoundlandand Labrador (collectively, the Jurisdictions) has receivedan application from Sherritt Power Corporation (the Applicant)for a decision under the securities legislation of the Jurisdictions(the Legislation) that the Applicant be deemed to have ceasedto be a reporting issuer under the Legislation.

AND WHEREAS pursuant to section 3.2 ofNational Policy 12-201 - Mutual Reliance Review System for ExemptiveRelief Applications (the National Policy), the Ontario SecuritiesCommission is the principal regulator for this application.

AND WHEREAS the Applicant has representedto the Decision Makers that:

1.1. The Applicant was incorporated underthe Business Corporations Act (New Brunswick) by acertificate of an amalgamation on March 28, 2003.

1.2. The head office of the Applicant is locatedat 1133 Yonge Street, Toronto, Ontario, M4T 2Y7.

1.3. The Applicant is the corporation resultingfrom the amalgamation (the Amalgamation) on March 28, 2003of Sherritt Power Corporation (Old Sherritt Power) and 605447N.B. Ltd. (Subco), a wholly-owned subsidiary of Sherritt InternationalCorporation (Sherritt International).

1.4. As a result of the Amalgamation, theApplicant became a reporting issuer in the Jurisdictions onMarch 28, 2003.

1.5. The authorized capital of Old SherrittPower consisted of an unlimited number of common shares (theCommon Shares) and an unlimited number of preferred shares,of which 8,050,000 Common Shares and no preferred shares wereissued and outstanding as of February 25, 2003. At the timeof the Amalgamation, Subco owned 4,000,000 of the outstandingCommon Shares.

1.6. As of February 25, 2003, Old SherrittPower also had outstanding $180.45 million principal amountof 12.125% amortizing notes due March 31, 2007 (the Old SherrittNotes). The Old Sherritt Notes were issued pursuant to a prospectusof Old Sherritt Power dated February 25, 1998 and traded inthe over-the-counter market.

1.7. Upon the Amalgamation:

1.7.1. each shareholder of Old SherrittPower, other than Subco, received 1.45 restricted votingshares of Sherritt International for each Common Share held;

1.7.2. each Common Share held by Subco wascancelled without any payment therefore;

1.7.3. the Common Shares held by shareholdersof Old Sherritt Power other than Subco were cancelled;

1.7.4. each issued common share of Subcowas converted into one common share of the Applicant; and

1.7.5. the terms of the Old Sherritt Noteswere amended (the Amended Notes) by way of an Amended andRestated Trust Indenture dated March 28, 2003 amongst OldSherritt Power, Sherritt International and CIBC Mellon TrustCompany (the Amended Trust Indenture) and, as a result ofthe Amalgamation, the Amended Notes became obligations ofthe Applicant.

1.8. On March 28, 2003, immediately followingthe Amalgamation, the Applicant transferred all of its assetsto Sherritt International and Sherritt International assumedall the liabilities of the Applicant, including the obligationsof the Applicant with respect to the Amended Notes under theAmended Trust Indenture (the Applicant Wind-Up). Upon theApplicant Wind-Up and pursuant to the Amended Trust Indenture,Sherritt International expressly assumed all of the obligationsof the Applicant under the Amended Trust Indenture and theAmended Notes and succeeded to the rights and powers of theApplicant under the Amended Trust Indenture and the Applicantwas relieved of all further obligations and covenants underthe Amended Trust Indenture and the Amended Notes.

1.9. As a result of the Amalgamation and relatedtransactions, all of the shareholders of Old Sherritt Power,other than Subco, became shareholders of Sherritt Internationaland, as described above, Sherritt International expresslyassumed all of the obligations of the Applicant with respectto the Amended Notes and the Applicant was relieved of allfurther obligations and covenants with respect to the AmendedNotes.

1.10. The authorized capital of the Applicantconsists of an unlimited number of common shares of which4,000,000 common shares are issued and outstanding as of thedate hereof. Sherritt International is now the sole shareholderof the Applicant.

1.11. Other than the common shares of theApplicant held by Sherritt International, the Applicant hasno securities, including debt securities, outstanding.

1.12. The Applicant is currently a reportingissuer in each of Alberta, Saskatchewan, Ontario, Québec,Nova Scotia and Newfoundland and Labrador and is not in defaultof its obligations as a reporting issuer in those jurisdictions,with the exception of failing to file its annual financialstatements, annual information form and annual report forthe year ended December 31, 2002 and its interim financialstatements for the period ended March 31, 2003 and failingto pay its annual corporate finance participation fee within140 days of the year ended December 31, 2002.

1.13. The Common Shares were delisted fromthe Toronto Stock Exchange on April 1, 2003. None of Old SherrittPower's securities are currently listed or quoted on any stockexchange or quotation system in Canada or elsewhere.

1.14. None of the Applicant's securities arecurrently listed or quoted on any stock exchange or quotationsystem in Canada or elsewhere.

1.15. The Applicant does not intend to seekpublic financing by way of an offering of its securities.

AND WHEREAS under the National Policy,this MRRS Decision Document evidences the decision of each DecisionMaker (collectively, the Decision).

AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met.

THE DECISION of the Decision Makers underthe Legislation is that the Applicant is deemed to have ceasedto be a reporting issuer under the Legislation.

June 26, 2003.

"Robert L. Shirriff"
"Robert W. Korthals"