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Friday, March 29, 2024

Cliffs Natural Resources’ CEO Nixes Spin-Off Plan

Courtesy of Benzinga.

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Cliffs Natural Resources (NYSE: CLF) Chief Executive Lourenco Goncalves appeared to nix a spin-off of international operations and said instead he'd be interested in their sale.

Goncalves, named to his position earlier this month, was backed by activist hedge fund Casablanca Capital that won a proxy battle last month for control of the Cleveland-based iron mining company.

Casablanca has said it wants a spin-off of international operations and to set up its U.S. business as a master-limited partnership.

But Goncalves has a different idea. "I've made it clear, I don't support splitting up the company," Goncalves told The Wall Street Journal.

Gonclaves wants to focus on the company's most profitable U.S. operations which include five iron mines in Minnesota and Michigan.

Other assets including coal mines in Appalachia and iron mines in Canada and Australia, "we'd sell for the best bid as long as the best bid meets the criteria for what we think the asset is worth," Gonclaves told the newspaper.

Casablanca recently named six of Cliff's 11 board members. Surviving incumbent board member Timothy W. Sullivan resigned August 11 with a letter accusing Gonclaves of "not wanting to hear anything that might be contrary to your pre-scripted plan."

On Tuesday, the company announced a $200 million share buyback and said it would modify its debt agreements to pay for the plan.

Cliffs traded recently at $16.28, up 1.9 percent.

Posted-In: News Wall Street Journal Asset Sales Management Media

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