Cliffs Natural (CLF) to Restructure Bloom Lake Mine - Analyst Blog
Cliffs Natural Resources Inc. (CLF) said that Bloom Lake General Partner Limited and certain of its affiliates, including Cliffs Quebec Iron Mining ULC (collectively called Bloom Lake Group) have started restructuring proceedings in Montreal, Quebec, under the Companies' Creditors Arrangement Act (Canada) ("CCAA"). The Bloom Lake group had previously suspended operations and has been looking for opportunities to sell some of its Canadian assets.
The Bloom Lake Group has stopped generating any revenues and is unable to meet its obligations. The Initial CCAA Order will deal with the Bloom Lake Group's immediate liquidity issues and will allow it to preserve and protect its assets for the advantage of all stakeholders while restructuring and sale options are being explored.
As part of the CCAA process, the Court has appointed FTI Consulting Canada Inc. as the monitor, which will scrutinize the activities of the Bloom Lake Group and offer assistance to the group and its stakeholders in respect of the process.
Recently, Cliffs also closed the divestment of its Logan County Coal assets, located in West Virginia, to Coronado Coal II LLC, an affiliate of Coronado Coal LLC. The company completed the sale for a cash consideration of $174 million and the assumption of certain liabilities.
Cliffs sees tax benefit in the range of 20% to 25% of the earlier disclosed pre-tax loss of about $400 million, representing an additional benefit of $80 million to $100 million in future cash tax savings. The company will record results of the transaction in its fourth-quarter 2014 earnings.
Cliffs currently carries a Zacks Rank #3 (Hold).
Other mining companies with a better Zacks Rank include Golden Star Resources, Ltd. (GSS), Pretium Resources Inc. (PVG) and Lake Shore Gold Corp. (LSG). All of these stocks carry a Zacks Rank #2 (Buy).
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