Teck Resources to split company and spin off steelmaking coal business
VANCOUVER — Teck Resources Ltd. has announced a plan to split the company into Teck Metals Corp. and Elk Valley Resources Ltd., which will hold its steelmaking coal business.
Teck shareholders will receive 0.1 of a common share in Elk Valley Resources for each Teck share they hold plus 39 cents in cash per share.
In exchange for the coal assets, Elk Valley Resources will make quarterly payments to Teck Metals consisting of royalty payments and preferred share redemptions.
The royalty will be payable until $7.0 billion in payments have been made or Dec. 31, 2028, whichever comes later. The preferred shares will have an aggregate $4.4-billion redemption amount and a 6.5 per cent cumulative dividend.
Teck says it has also reached a deal with its joint venture partners and major customers, Nippon Steel Corp. and Posco, to exchange their minority interests in the Elkview and Greenhills operations for interests in the new company.
NSC’s exchange of its Elkview interest and a $1.025-billion cash investment will give it a 10 per cent stake in Elk Valley Resources, while Posco will receive a 2.5 per cent interest.
This report by The Canadian Press was first published Feb. 21, 2023.
Companies in this story: (TSX:TECK.B)
The Canadian Press