Following the transfer, Sherritt will continue a 12% ownership interest in the JV.
The agreement will enable the company to eliminate $1.3bn in additional partner loans.
Sherritt International president and CEO David Pathe said: “This agreement addresses our ’40 for 12’ issue and eliminates the uncertainty caused by the Ambatovy non-recourse debt while ensuring that we retain an ownership stake in the world’s largest finished nickel laterite mine.
“Closing of the transaction will represent the culmination of numerous discussions with our partners, bondholders, and other lenders over the past three years to preserve liquidity, de-lever our balance sheet, extend the maturities of our outstanding public debt, and defer Ambatovy debt repayment.”
The company expects to pay $35m to fulfil non-funding to date, including accrued interest.
Notwithstanding the transaction, the company will have outstanding partner loans of $101m due for payment by 2023.
An additional payment of $13m, set to be made by the company, will be placed into an escrow account to cover potential future funding requirements of the JV.
Sherritt will continue to retain operatorship of the JV until at least 2024.
Expected to close by the end of this year, the transaction is subject to certain conditions and third party consents.