Cliffs Natural Resources Inc. (NYSE:CLF) has revealed on Wednesday that it is offering about 44.40 million shares at $6.75 each in an underwritten public offering, which, subject to regulatory requirements, will close on or about the following Wednesday.
Underwritten Public Offering
The underwriters have a 30-day option to acquire a maximum of 6.70 million additional shares.
BofA Merrill Lynch, Credit Suisse, Deutsche Bank Securities, and Goldman, Sachs & Co. serve as the joint bookrunners for the underwritten public offering.
The net proceeds from the underwritten public offering will be used primarily to settle debts, particularly the senior notes due by January 18.
Q2 Financial Highlights
Cliffs Natural Resources has issued its earnings report for the second quarter late in July.
For the period, the company had $496 million in consolidated revenues, which is slightly down from the consolidated revenues of $498 million seen during the same period in 2015.
Cost of goods sold declined 8% year-over-year to $405 million from $441 million.
Net income came in at $30 million, which is comparable to a net loss of $38 million during the same quarter last year. Consequently, Cliffs Natural Resources posted a diluted earnings per share (EPS) of $0.07.
In terms of quarterly expenses, the company reported a 27% year-over-year drop in Selling, General, and Administrative (SG&A) expenses to $23 million from $31 million. Interest expenses also tumbled 20% year-over-year to $51 million from $64 million.
One of the most significant milestones accomplished during the second quarter include the renewal of the ArcelorMittal SA (ADR) (NYSE:MT) supply agreement. As Lourenco Goncalves, Cliffs Natural Resources CEO and President, noted, the budding partnership between Cliffs Natural Resources and ArcelorMittal is substantially beneficial for both companies.
Also, during the second quarter, Cliffs Natural Resources has negotiated with US Steel Canada, its newest client.
Accordingly, the company is highly encouraged with these accomplishments and results, further gearing its resources and focus on strengthening its balance sheet and repaying debts.
In behalf of Cliffs Natural Resources, Goncalves expressed his confidence for longer-term prospects.