Rio Tinto Announces Cloud Peak IPO

Rio Tinto announced during August that its wholly-owned subsidiary, Cloud Peak Energy Inc., has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission (SEC) in connection with Cloud Peak Energy’s proposed initial public offering (IPO) of its common stock. Cloud Peak Energy, comprised of most of the North American coal assets of Rio Tinto Energy America, is the second largest producer of coal in the U.S. and in the Powder River Basin, operating three of the five largest coal mines in the region. The deal has been valued at $1 billion.

According to The Associated Press, Anglo-Australian miner Rio Tinto, which is fending off a takeover approach from fellow miner BHP Billiton Ltd., noted that the total offering price was estimated solely to calculate its registration fee and may change. However, Rio Tinto added that it is still deciding whether to pursue a listing or a different form of divestment. A final decision would be made “once these options have been more fully explored,” it said in a statement.

Rio Tinto said in November it was exploring the possible sale of some or all of its U.S. coal assets to help pay debt used to purchase Canada’s Alcan. “We are in active discussions with a number of prospective buyers who have expressed strong interest in those coal assets,” said CFO Guy Elliott.

The SEC filing did not reveal the number of shares the company planned to sell or its expected price. The lead underwriter for the offering is Credit Suisse Securities (USA) LLC. The offering of common stock will be made only by means of a prospectus.

As featured in Womp 08 Vol 7 - www.womp-int.com