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Cleveland-Cliffs improves balance sheet, sells convertibles and debt
By Devika Patel
Knoxville, Tenn., April 20 – Cleveland-Cliffs Inc. has an “improved” capital structure and a balance sheet that is “in much better shape” than the company had a year ago.
The company issued secured debt and convertibles, which will be treated as debt rather than equity, in the first quarter.
“We issued a combination of secured bonds and convertible notes [in the first quarter] and were able to price the deal at a very attractive weighted average coupon of 3.4%,” chairman, president and chief executive officer Lourenco Goncalves said on the company’s first quarter ended March 31 earnings conference call on Friday.
“The 1.4% convertible notes will be treated as debt, not equity, both accounting-wise and as we plan out our business.
“Our issuance of the converts was not a dilutive exercise.
“You’ll see that reflected in our financials, with the convert categorized as a debt instrument on the balance sheet and with no change to our share count on the income statement in the calculation of earnings per share this quarter,” Goncalves said.
The company now has an improved capital structure and better balance sheet than it had a year ago.
“The balance sheet is clearly in much better shape now than it was a year ago,” executive vice president and chief financial officer Timothy K. Flanagan
“With the improved capital structure in place and strong earnings outlook, we are very well positioned to both grow the company and weather any volatility the market may throw at us,” Flanagan said.
For the first quarter of 2018, total adjusted EBITDA was $11.6 million, compared to $92.2 million in the prior year.
As of March 31, 2018, cash and cash equivalents were $786.6 million, compared to $1,007,700,000 as of Dec. 31, 2017.
Long-term debt, as of March 31, 2018, was $2,308,200,000, compared to $2,304,200,000 as of Dec. 31, 2017.
Cleveland-Cliffs is a Cleveland-based independent iron ore mining company.
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