Cloud Peak to price $250 million of mandatory convertible preferreds

By Rebecca Melvin

New York, Oct. 1 - Cloud Peak Energy Inc. plans to price $250 million of three-year mandatory convertible preferred stock at a liquidation preference price of $50 per share via underwriter Credit Suisse, according to a Wednesday filing with the Securities and Exchange Commission.

There will be a concurrent initial public offering of common stock.

Cloud Peak was formerly part of Rio Tinto America Inc., an indirect wholly owned subsidiary of Rio Tinto plc. Rio Tinto America will be the selling stockholder of the series A mandatory convertible preferred stock.

Cloud Peak will own Rio Tinto America western U.S. coal business, other than the Colowyo mine.

Preferred dividends will be payable on a cumulative basis.

Cloud Peak will not receive any proceeds from the sale of preferred stock by Rio Tinto America.

Calls to Credit Suisse for timing or price talk on the convertible offering were not immediately returned.

Cloud Peak, is a Gillette, Wyo.-based coal producer.

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