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Cleveland-Cliffs Announces Convertibility of Preferred Stock
07/01/2008 - Cleveland-Cliffs fulfills the trading price condition for the conversion right of its 3.25% redeemable cumulative convertible perpetual preferred stock, with the result that preferred stock may be surrendered for conversion at any time during the fiscal third quarter ending Sept. 30, 2008.
Cleveland-Cliffs Inc announced the fulfillment of the trading price condition for the conversion right of its 3.25% redeemable cumulative convertible perpetual preferred stock. As a result, the preferred stock may be surrendered for conversion at any time during the fiscal third quarter ending Sept. 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 second quarter exceeded 110% of the then-applicable conversion price of the preferred stock. The satisfaction allows conversion of the preferred stock only during the fiscal 2008 third quarter; conversion could continue after the third quarter if certain conditions set forth in Cleveland-Cliffs’ amended articles of incorporation are satisfied.
Cliffs’ preferred stock was also convertible during each of the previous 14 fiscal quarters as the result of satisfaction of the trading-price condition during the applicable periods of the relevant preceding fiscal quarters.
The conversion rate is currently 133.0646 common shares per share of preferred stock. This equates to a conversion price of approximately $7.52 per common share, subject to adjustment in certain circumstances including payment of dividends on the common shares.
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% 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.
Headquartered in Cleveland, Ohio, Cleveland-Cliffs Inc. 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 85% 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% interest in the Amapá Project, a Brazilian iron ore project, and a 45% economic interest in the Sonoma Project, an Australian coking and thermal coal project.
