WASHINGTON (dpa-AFX) - Cliffs Natural Resources Inc. (CLF) said that during the fourth quarter of 2014 and the beginning of January 2015, it has reduced its net debt balance by more than $400 million.
The company said it achieved the accelerated debt reduction through the repayment of short-term debt as well as the repurchase of more than $200 million aggregate principal amount of senior notes in the open market at an average discount of 34 percent to par, capturing a total discount of about $70 million.
The company generated the sources of funds to execute the accelerated debt reduction program through cash from operations generated during the fourth quarter of 2014 and net proceeds from the sale of Cliffs Logan County Coal.
In addition, Cliffs' board of directors has decided to eliminate the quarterly dividend of $0.15 per share on the company's common shares. The decision is applicable to the first quarter of 2015 and all subsequent quarters.
The company noted that the elimination of the dividend will provide it with additional free cash of $92 million annually, which it intends to use for further debt reduction.
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