Photo by: Bloomberg
TORONTO (miningweekly.com) – The newly reconstituted board of iron-ore and coal miner Cliffs Natural Resources on Monday authorised the company to modify debt agreements if needed to allow the company to implement a $200-million share buy-back.
Cleveland, Ohio-based Cliffs revealed that its board sanctioned it “to take all the necessary steps to remove the limitations and restrictions present in the company’s current debt agreements which preclude Cliffs’ ability to execute the buy-back programme”.
Such steps included negotiating consents and amendments to the applicable debt instruments.
Cliffs added that it would be working with its bank group to ensure the buy-back programme was effectively implemented in a timely manner before December 31, 2015.
"The implementation of our new strategy centered on the US iron-ore business has successfully started. With that, we are very pleased that our newly reconstituted board has agreed with our conviction that, at this point, the best use of our capital is to invest in our own business, our people and our assets by buying back Cliffs’ common stock,” newly elected Cliffs chairperson and CEO Lourenco Goncalves said.
Cliffs also stated that, as part of his severance agreement, former CEO Gary Halverson had resigned from the board.
Cliffs had earlier this month disclosed that it expected to make a payment of $11-million to Halverson regarding the termination of his employment.
He was ousted as Cliffs CEO after only six months in the position, following activist shareholder Casablanca Capital’s win in a proxy contest through which it appointed its own CEO, Goncalves, at the start of the month.
Cliffs’ NYSE-listed stock raced to an intraday high of $16.37 on the news, up $0.56 a share on its opening price of $0.81 apiece. On Monday afternoon trading, the stock changed hands at around $15.89 apiece.