Teck Cominco sells Kinross shares for $101 million
TORONTO - Teck Cominco said on Wednesday it sold the 5.6 million shares of Kinross Gold Teck acquired when it sold Kinross its 60 percent share of the Lobo-Marte gold property in Chile.
Teck, which has been selling assets and cutting costs to pay down debt it took on last year to buy Fording Canadian Coal Trust, will pocket about $101 million for the shares, bringing its gross proceeds on the sale of Lobo Marte to about $141 million, it said.
Teck, whose already-surging shares pushed higher on news of the sale, will record a pre-tax gain of $171 million on sale of Lobo Marte and the shares, of which $160 million will be recorded in the first quarter, it said.
It said it sold the shares for $18. Kinross was trading at $15.20 on the New York Stock Exchange, but was above $18 late last month.
Teck took on $9.8 billion in debt to buy Fording, $5.8 billion of which was a bridge loan that is due in October.
The company had hoped to pay down most of the loan through cash flow and tax savings, but the plunge in copper, coal, and zinc prices has forced Teck to begin a fire sale of assets to get the loan down to a level it can renegotiate.
Teck has said it will sell its gold assets and it is taking bids on a minority stake in its Elk Valley coal business, which it took full control of when it bought Fording. Also on the table is Teck's 20 percent stake in the Fort Hills oil sands project.
The company's shares were up 8.2 percent at C$8.64 on the Toronto Stock Exchange.
($1=$1.24 Canadian) (Reporting by Cameron French)
(In U.S. dollars, unless noted)
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