logo
Share SHARE
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

Quick Facts

Editors Pick
Netflix offers a bunch of popular movies, Netflix originals, new TV shows, and documentaries in the month of December 2016, including the second season of the hit sitcom 'Fuller House' and 2016 blockbuster 'Captain America: Civil War', as all are getting ready for the holidays. SpaceX, the space transport company of Tech entrepreneur Elon Musk, is likely to launch its first Falcon 9 rocket since September's launchpad explosion on December 16. SpaceX's satellite launch customer Iridium Communications Inc. announced Thursday that its next-generation global satellite constellation, Iridium NEXT, will be launched on SpaceX's Falcon 9 rocket. Bank holding company Wells Fargo & Co., amid struggles to re-establish itself after the fake-account scandal, on Thursday said it has separated the roles of the Chairman and Chief Executive Officer formally, by amending the company's By-Laws. The amendment is also for the Chairman and Vice Chairman of the Board to be independent directors. The amendments were effective immediately.
comments powered by Disqus
Follow RTT