FONT-SIZE Plus   Neg

OM Group Completes Divestiture Of Its Cobalt Business

OM Group, Inc. (OMG) 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.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Apple Inc. (AAPL) reported its third straight quarter of iPhone sales and revenue declines after the market closed on Tuesday. The tech giant's fourth-quarter profit trumped Wall Street expectations, while revenues fell short. Although, Apple reported its third straight year-over-year decline in iPhone... Buick, Lexus and Toyota are among the top brands with highest reliability rating in the latest annual brand reliability survey. A New York woman has filed a $20 million lawsuit against Kentucky Fried Chicken, accusing the fast-food giant of 'false and deceptive trade practice' and also of misleading customers as she did not get enough chicken in her $20 "Fill-Up."
comments powered by Disqus
Follow RTT