On May 12, Cleveland, Ohio-based miner and iron ore pellet producer Cliffs Natural Resources Inc. (Cliffs) announced that it is offering to sell 12 million common shares through an underwritten offering.
Cliffs said that it intended to use the net proceeds from the offering for general corporate purposes, which may include, among other things, funding certain capital expenditures, debt repayment or "strategic transactions."
Accordingly, J.P. Morgan Securities Inc. and Merrill Lynch & Co. are acting as joint bookrunners of the offering. The underwriters have been granted an over-allotment option to purchase an additional 1.8 million common shares.
In addition to the common share offering, Cliffs also announced that its directors have agreed to a 10 percent reduction in their fees, and all executives at senior vice-president level or higher will have their base compensation reduced by seven percent, effective as of July 1. The company will also suspend payments of retirement-fund contributions for salaried employees.
Altogether, the compensation-related cuts are expected to save the company about $15-million this year.
Cliffs has also reduced its quarterly common share dividend by 55 percent, to $0.04 per share, which is expected to save the company about $22 million a year.'