Cleveland-Cliffs Inc. (NYSE: CLF) announced today the
commencement of a tender offer to purchase (the “Tender Offer”),
subject to certain terms and conditions, any and all of its
outstanding 6.750% Senior Secured Notes due 2026 (the “Notes”), at
the price set forth below.
The Tender Offer is scheduled to expire at 5:00 p.m., New York
City time, on March 13, 2024 (the “Expiration Time”), unless
extended or earlier terminated by the Company. The Tender Offer is
being made pursuant to an Offer to Purchase and related Notice of
Guaranteed Delivery, each dated March 4, 2024 (together, the
“Tender Offer Materials”), which set forth a more detailed
description of the terms and conditions of the Tender Offer.
Holders of the Notes are urged to carefully read the Tender Offer
Materials before making any decision with respect to the Tender
Offer.
The following table sets forth certain terms of the Tender
Offer:
Title of Security
CUSIP Number &
ISIN
Principal Amount
Outstanding
Tender Offer
Consideration(1)(2)
6.750% Senior Secured Notes due
2026
144A:
$828,927,000
$1,018.00
CUSIP: 185899AG6
ISIN: US185899AG62
REG
S:
CUSIP: U1852LAF4
ISIN: USU1852LAF41
(1)
Excludes accrued and unpaid interest up
to, but not including, the Settlement Date (as defined below),
which will be paid in addition to the Tender Offer Consideration
(as defined below).
(2)
Per $1,000 principal amount of Notes
validly tendered and accepted.
Subject to the terms and conditions of the Tender Offer, holders
of the Notes who validly tender and do not subsequently validly
withdraw their Notes, or deliver a properly completed and duly
executed Notice of Guaranteed Delivery, prior to the Expiration
Time will be eligible to receive the tender offer consideration
payable for each $1,000 principal amount of Notes specified in the
table above (the “Tender Offer Consideration”).
The Company will purchase any Notes that are validly tendered
and not validly withdrawn prior to the Expiration Time, subject to
the satisfaction or waiver of all conditions to the Tender Offer,
promptly following the Expiration Time (the “Settlement Date”). The
Company will purchase any Notes with respect to which a properly
completed and duly executed Notice of Guaranteed Delivery has been
delivered by the Expiration Time (to the extent that such Notes are
not delivered prior to the Expiration Time), subject to the
satisfaction or waiver of all conditions to the Tender Offer, on
the Settlement Date. The Settlement Date is currently expected to
be on March 18, 2024, assuming all conditions to the Tender Offer
have been satisfied or waived. Holders whose Notes are accepted for
purchase will also receive accrued and unpaid interest up to, but
not including, the Settlement Date. For the avoidance of doubt,
accrued interest will cease to accrue on the Settlement Date for
all Notes accepted in the Tender Offer, including those tendered by
the guaranteed delivery procedures set forth in the Tender Offer
Materials.
The obligation of the Company to accept for purchase and to pay
the Tender Offer Consideration and the accrued and unpaid interest
on the tendered Notes pursuant to the Tender Offer is not subject
to any minimum tender condition, but is subject to the satisfaction
or waiver of certain conditions described in the Tender Offer
Materials, including the consummation of one or more debt financing
transactions in an aggregate principal amount of at least $750.0
million on terms and conditions acceptable to the Company (the
“Financing Condition”), in its sole discretion. The Tender Offer
may be amended, extended, terminated or withdrawn.
Concurrently with the commencement of the Tender Offer, the
Company will issue a conditional notice to redeem in full the
outstanding Notes (after giving effect to any purchases of the
Notes pursuant to the Tender Offer) at a redemption price of
101.688% of the principal amount thereof, plus accrued and unpaid
interest to, but excluding, the redemption date (which is expected
to be April 3, 2024) pursuant to the terms of the indenture
governing the Notes. The redemption of the Notes is subject to the
Financing Condition, but will not be conditioned on the
consummation of the Tender Offer or the tender of any specified
amount of the Notes. Nothing in this announcement should be
construed as a notice of redemption with respect to the Notes, as
any redemption will be made pursuant to a notice of redemption in
accordance with the indenture governing the Notes.
The Company presently intends to redeem any Notes that remain
outstanding after consummation of the Tender Offer. This statement
of intent shall not constitute a notice of redemption under the
indenture governing the Notes.
The Company has retained Wells Fargo Securities, LLC to serve as
Dealer Manager for the Tender Offer. Global Bondholder Services
Corporation has been retained to serve as the Information Agent and
Depositary for the Tender Offer. Questions regarding the Tender
Offer may be directed to Wells Fargo Securities, LLC at 550 South
Tryon Street, 5th Floor, Charlotte, North Carolina 28202, Attn:
Liability Management Group, (866) 309-6316 (toll-free), (704)
410-4759 (collect) or by email to
liabilitymanagement@wellsfargo.com. Tender Offer Materials may be
obtained by calling Global Bondholder Services Corporation at (855)
654-2014 (toll-free) or (212) 430-3774 (collect for banks and
brokers) or by visiting
https://www.gbsc-usa.com/clevelandcliffs/.
The Company is making the Tender Offer only by, and pursuant to,
the terms of the Tender Offer Materials. None of the Company, the
Dealer Manager, the Information Agent, the Trustee with respect to
the Notes or the Depositary makes any recommendation as to whether
holders of the Notes should tender or refrain from tendering their
Notes. Holders of the Notes must make their own decision as to
whether to tender Notes and, if so, the principal amount of the
Notes to tender. The Tender Offer is not being made to holders of
the Notes in any jurisdiction in which the making or acceptance
thereof would not be in compliance with the securities, blue sky or
other laws of such jurisdiction. In any jurisdiction in which the
securities laws or blue sky laws require the Tender Offer to be
made by a licensed broker or dealer, the Tender Offer will be
deemed to be made on behalf of the Company by the Dealer Manager or
one or more registered brokers or dealers that are licensed under
the laws of such jurisdiction.
This news release does not constitute an offer to purchase
securities or a solicitation of an offer to sell any securities or
an offer to sell or the solicitation of an offer to purchase any
securities nor does it constitute an offer or solicitation in any
jurisdiction in which such offer or solicitation is unlawful.
About Cleveland-Cliffs Inc.
Cleveland-Cliffs is the largest flat-rolled steel producer in
North America. Founded in 1847 as a mine operator, Cliffs also is
the largest manufacturer of iron ore pellets in North America. The
Company is vertically integrated from mined raw materials, direct
reduced iron, and ferrous scrap to primary steelmaking and
downstream finishing, stamping, tooling, and tubing.
Cleveland-Cliffs is the largest supplier of steel to the automotive
industry in North America and serves a diverse range of other
markets due to its comprehensive offering of flat-rolled steel
products. Headquartered in Cleveland, Ohio, Cleveland-Cliffs
employs approximately 28,000 people across its operations in the
United States and Canada.
Forward-Looking Statements
This release contains statements that constitute
“forward-looking statements” within the meaning of the federal
securities laws. All statements other than historical facts,
including, without limitation, statements regarding our current
expectations, estimates and projections about our industry or our
businesses, are forward-looking statements. We caution investors
that any forward-looking statements are subject to risks and
uncertainties that may cause actual results and future trends to
differ materially from those matters expressed in or implied by
such forward-looking statements. Investors are cautioned not to
place undue reliance on forward-looking statements. Among the risks
and uncertainties that could cause actual results to differ from
those described in forward-looking statements are the following:
continued volatility of steel, iron ore and scrap metal market
prices, which directly and indirectly impact the prices of the
products that we sell to our customers; uncertainties associated
with the highly competitive and cyclical steel industry and our
reliance on the demand for steel from the automotive industry;
potential weaknesses and uncertainties in global economic
conditions, excess global steelmaking capacity, oversupply of iron
ore, prevalence of steel imports and reduced market demand; severe
financial hardship, bankruptcy, temporary or permanent shutdowns or
operational challenges of one or more of our major customers, key
suppliers or contractors, which, among other adverse effects, could
disrupt our operations or lead to reduced demand for our products,
increased difficulty collecting receivables, and customers and/or
suppliers asserting force majeure or other reasons for not
performing their contractual obligations to us; risks related to
U.S. government actions with respect to Section 232 of the Trade
Expansion Act of 1962 (as amended by the Trade Act of 1974), the
United States-Mexico-Canada Agreement and/or other trade
agreements, tariffs, treaties or policies, as well as the
uncertainty of obtaining and maintaining effective antidumping and
countervailing duty orders to counteract the harmful effects of
unfairly traded imports; impacts of existing and increasing
governmental regulation, including potential environmental
regulations relating to climate change and carbon emissions, and
related costs and liabilities, including failure to receive or
maintain required operating and environmental permits, approvals,
modifications or other authorizations of, or from, any governmental
or regulatory authority and costs related to implementing
improvements to ensure compliance with regulatory changes,
including potential financial assurance requirements, and
reclamation and remediation obligations; potential impacts to the
environment or exposure to hazardous substances resulting from our
operations; our ability to maintain adequate liquidity, our level
of indebtedness and the availability of capital could limit our
financial flexibility and cash flow necessary to fund working
capital, planned capital expenditures, acquisitions, and other
general corporate purposes or ongoing needs of our business, or to
repurchase our common shares; our ability to reduce our
indebtedness or return capital to shareholders within the currently
expected timeframes or at all; adverse changes in credit ratings,
interest rates, foreign currency rates and tax laws; the outcome
of, and costs incurred in connection with, lawsuits, claims,
arbitrations or governmental proceedings relating to commercial and
business disputes, antitrust claims, environmental matters,
government investigations, occupational or personal injury claims,
property-related matters, labor and employment matters, or suits
involving legacy operations and other matters; supply chain
disruptions or changes in the cost, quality or availability of
energy sources, including electricity, natural gas and diesel fuel,
critical raw materials and supplies, including iron ore, industrial
gases, graphite electrodes, scrap metal, chrome, zinc, other
alloys, coke and metallurgical coal, and critical manufacturing
equipment and spare parts; problems or disruptions associated with
transporting products to our customers, moving manufacturing inputs
or products internally among our facilities, or suppliers
transporting raw materials to us; the risk that the cost or time to
implement a strategic or sustaining capital project may prove to be
greater than originally anticipated; our ability to consummate any
public or private acquisition transactions and to realize any or
all of the anticipated benefits or estimated future synergies, as
well as to successfully integrate any acquired businesses into our
existing businesses; uncertainties associated with natural or
human-caused disasters, adverse weather conditions, unanticipated
geological conditions, critical equipment failures, infectious
disease outbreaks, tailings dam failures and other unexpected
events; cybersecurity incidents relating to, disruptions in, or
failures of, information technology systems that are managed by us
or third parties that host or have access to our data or systems,
including the loss, theft or corruption of sensitive or essential
business or personal information and the inability to access or
control systems; liabilities and costs arising in connection with
any business decisions to temporarily or indefinitely idle or
permanently close an operating facility or mine, which could
adversely impact the carrying value of associated assets and give
rise to impairment charges or closure and reclamation obligations,
as well as uncertainties associated with restarting any previously
idled operating facility or mine; our level of self-insurance and
our ability to obtain sufficient third-party insurance to
adequately cover potential adverse events and business risks;
uncertainties associated with our ability to meet customers’ and
suppliers’ decarbonization goals and reduce our greenhouse gas
emissions in alignment with our own announced targets; challenges
to maintaining our social license to operate with our stakeholders,
including the impacts of our operations on local communities,
reputational impacts of operating in a carbon-intensive industry
that produces greenhouse gas emissions, and our ability to foster a
consistent operational and safety track record; our actual economic
mineral reserves or reductions in current mineral reserve
estimates, and any title defect or loss of any lease, license,
easement or other possessory interest for any mining property; our
ability to maintain satisfactory labor relations with unions and
employees; unanticipated or higher costs associated with pension
and other post-employment benefit obligations resulting from
changes in the value of plan assets or contribution increases
required for unfunded obligations; uncertain availability or cost
of skilled workers to fill critical operational positions and
potential labor shortages caused by experienced employee attrition
or otherwise, as well as our ability to attract, hire, develop and
retain key personnel; the amount and timing of any repurchases of
our common shares; potential significant deficiencies or material
weaknesses in our internal control over financial reporting; and
our ability to successfully repurchase and/or redeem the Secured
Notes.
For additional factors affecting the business of Cliffs, refer
to Part I – Item 1A. Risk Factors of our Annual Report on Form 10-K
for the year ended December 31, 2023, and other filings with the
U.S. Securities and Exchange Commission.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240303579343/en/
MEDIA CONTACT: Patricia Persico Senior Director,
Corporate Communications (216) 694-5316
INVESTOR CONTACT: James Kerr Director, Investor Relations
(216) 694-7719
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