Cleveland-Cliffs Announces Convertibility of Preferred Stock
Cleveland-Cliffs Inc (NYSE:CLF) today announced that the trading price condition for the conversion right of its 3.25 percent redeemable cumulative convertible perpetual preferred stock is satisfied and, as a result, the preferred stock may be surrendered for conversion at any time during the fiscal second quarter ending June 30, 2008.
The trading price condition was satisfied because the closing share price of Cleveland-Cliffs' common shares for at least 20 of the last 30 trading days of the fiscal 2008 first quarter exceeded 110 percent of the then applicable conversion price of the preferred stock. The satisfaction allows conversion of the preferred stock only during the fiscal 2008 second quarter. Conversion may continue after the fiscal 2008 second quarter if certain conditions set forth in Cleveland-Cliffs' amended articles of incorporation are satisfied.
The preferred stock was also convertible during each of the previous 13 fiscal quarters due to the satisfaction of the trading price condition during the applicable periods of the relevant preceding fiscal quarters.
The conversion rate is currently 66.1881 common shares per share of preferred stock. This equates to a conversion price of approximately $15.11 per common share, subject to adjustment in certain circumstances including payment of dividends on the common shares. Effective May 15, 2008, the Company will be distributing additional common shares pursuant to its two-for-one stock split declared on March 11, 2008. As a result, at the opening of business on May 16, 2008, the conversion rate will adjust accordingly.
Beginning January 20, 2009, Cliffs may redeem shares of the preferred stock by paying cash, its common shares valued at a discount of 2.5 percent from their market price or any combination thereof in an amount equal to the liquidation preference, plus any accumulated and unpaid dividends to the redemption date. Other conditions and terms can be found in the related prospectus dated July 22, 2004.
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Cleveland-Cliffs Inc, headquartered in Cleveland, Ohio, is an international mining company, the largest producer of iron ore pellets in North America and a major supplier of metallurgical coal to the global steelmaking industry. The Company operates six iron ore mines in Michigan, Minnesota and Eastern Canada, and three coking coal mines in West Virginia and Alabama. Cliffs also owns 80 percent of Portman Limited, a large iron ore mining company in Australia, serving the Asian iron ore markets with direct-shipping fines and lump ore. In addition, the Company has a 30 percent interest in the Amapa Project, a Brazilian iron ore project, and a 45 percent economic interest in the Sonoma Project, an Australian coking and thermal coal project.
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Note to Editors: There should be an accent over the last "a" in the word "Amapa" above.
Source: Cleveland-Cliffs Inc
Released March 31, 2008