The coal businesses, the “Pinnacle Mine” and Oak Grove Mine, of the Cliffs Natural Resources Inc. situated in the West Virginia and Alabama respectively, have been closed. The same has been acquired by “Seneca Coal Resources, LLC.”, whereby the transactions were valued at “$268 million”, as the latter assumed “all liabilities of the business”.
Furthermore, Cliffs may receive an additional amount of “up to $50 million contingent” from Seneca Coal, as per the “terms of a revenue sharing plan”; the same is valid till the end of 2020. The C.E.O, Chairman and the President of Cliff, Lourenco Goncalves stated:
"The sale of Pinnacle and Oak Grove to Seneca Coal marks Cliffs' exit from the coal business, and represents another very important step in the implementation of our US iron ore pellet-centric, environmentally compliant strategy. We are pleased to have found a buyer that was able to agree on a transaction that not only brings real value to Cliffs shareholders, but will also preserve jobs for the exceptional people at these two mines.
“I commend the Cliffs' coal operations team for an outstanding job achieving great safety, production and quality results, preserving the value of our coal business in light of the many headwinds the industry has faced over this past year. This transaction was only made possible due to the high quality of our people at the coal mines, and I wish them the very best as they move forward with Seneca Coal."
The closing of transaction took place on the 22nd December 2015, following the “signing of the deal”. As per the statement of the Company, the structure of the deal imitates that of a “sale of the equity interests of Cliffs' remaining coal business”, whereby including “the legal entities of Cliffs North American Coal LLC; Pinnacle Mining Company, LLC; Pinnacle Land Company, LLC; Oak Grove Resources, LLC; Oak Grove Land Company, LLC; and Beard Pinnacle, LLC”.
References:
http://www.streetinsider.com/
Furthermore, Cliffs may receive an additional amount of “up to $50 million contingent” from Seneca Coal, as per the “terms of a revenue sharing plan”; the same is valid till the end of 2020. The C.E.O, Chairman and the President of Cliff, Lourenco Goncalves stated:
"The sale of Pinnacle and Oak Grove to Seneca Coal marks Cliffs' exit from the coal business, and represents another very important step in the implementation of our US iron ore pellet-centric, environmentally compliant strategy. We are pleased to have found a buyer that was able to agree on a transaction that not only brings real value to Cliffs shareholders, but will also preserve jobs for the exceptional people at these two mines.
“I commend the Cliffs' coal operations team for an outstanding job achieving great safety, production and quality results, preserving the value of our coal business in light of the many headwinds the industry has faced over this past year. This transaction was only made possible due to the high quality of our people at the coal mines, and I wish them the very best as they move forward with Seneca Coal."
The closing of transaction took place on the 22nd December 2015, following the “signing of the deal”. As per the statement of the Company, the structure of the deal imitates that of a “sale of the equity interests of Cliffs' remaining coal business”, whereby including “the legal entities of Cliffs North American Coal LLC; Pinnacle Mining Company, LLC; Pinnacle Land Company, LLC; Oak Grove Resources, LLC; Oak Grove Land Company, LLC; and Beard Pinnacle, LLC”.
References:
http://www.streetinsider.com/
