Quick Facts
FONT-SIZE Plus   Neg
Share SHARE

OM Group Completes Divestiture Of Its Cobalt Business

RELATED NEWS
Trade OMG now with 

OM Group, Inc. (OMG: Quote) said Friday that it has completed the divestiture of its Advanced Materials business, including the sale of its downstream business, to a joint venture held by Freeport-McMoRan Copper & Gold Inc. (FCX), Lundin Mining Corp. (LUN, LUN.TO) and La Generale des Carrieres et des Mines.

OM Group received cash consideration of $325 million, plus about $30 million for cash retained in the business, upon the closing of the deal.

OM Group expects to use the proceeds, along with cash on-hand, to repay a substantial portion of its debt.

The sale agreements also provide for potential future cash consideration of up to an additional $110 million based on the business achieving certain revenue targets over a period of three years.

In connection with the sale, OM Group also transferred its equity interests in its DRC-based joint venture known as GTL to its joint venture partners, subject to a security interest in favor of OM Group with respect to the joint venture's performance of certain supply arrangements.

Following the sale, to assist the buyer of the downstream business with the ownership transition, OM Group will act as an intermediary of cobalt supply between GTL and the Freeport joint venture under a two-year agreement subject to delivery of 7,000 MT of feed. Also, OM Group will continue to serve as the U.S. distributor for refined cobalt products for a period of one year.

Both of the transition service agreements are back-to-back arrangements with minimal profit or cash flow impact anticipated for OM Group.

Register
To receive FREE breaking news email alerts for OM Group Inc and others in your portfolio

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
After moving modestly higher in morning trading, stocks showed a substantial move to the downside over the course of the trading day on Wednesday. The major averages pulled back well off their highs for the session, sliding firmly into negative territory. Ebola "czar" Ron Kain is scheduled to meet with President Barack Obama on Wednesday as he begins his efforts to coordinate the government's response to the deadly disease. Klain, who previously served as chief of staff to Vice President Joe Biden and then-Vice President Al Gore, was named as Ebola Response Coordinator last Friday. Potentially complicating the outlook for control of the Senate, the results of a SurveyUSA poll conducted for WXIA-TV in Atlanta suggest that the Georgia Senate race between Republican David Perdue and Democrat Michelle Nunn could be headed for a runoff.
comments powered by Disqus
FREE Newsletters, Analysis & Alerts

 

Stay informed with our FREE daily Newsletters and real-time breaking News Alerts. Sign up to receive the latest information on business news, health, technology, biotech, market analysis, currency trading and more.