(somewhat) o/t
Cyprus sells coal assets
German company offers $1.1 billion for properties
By Richard Williamson
Denver Rocky Mountain News Staff Writer
STOCK WATCH
Cyprus Amax Minerals Co., (CYM: NYSE) THURSDAY'S CLOSE: $14.81, up 44 cents.
Current
Cyprus Amax Minerals Co. sold its U.S. coal properties, including Colorado's largest mine, to Germany's top coal producer Thursday for $1.1 billion.
RAG International Mining GmbH will pay cash and assume debt for the Arapahoe County-based company's mines, which produced $800 million in revenue in 1998.
"We expect to use proceeds from this transaction to reduce debt, fund the existing share buyback program, significantly strengthen our financial position and support growth opportunities in our core mining businesses," Cyprus Chairman and Chief Executive Milton Ward said.
Cyprus, the fifth largest coal producer in the United States, has been selling assets for the past year, including its Amax Gold subsidiary and lithium mines. The company plans to become strictly a copper and molybdenum producer.
Analyst Victor Lazarorvici of Nesbitt Burns in New York said the $1.1 billion price was higher than he expected for the coal mines.
"I thought it was going to net $800 million to $1 billion," he said.
Cyprus is looking to expand its copper business through acquisitions or mergers. But Lazarovici said the new cash on the balance sheet, high quality copper mines and low share price-to-cash flow ratio makes Cyprus his top takeover target.
"The stock looks cheap to us," Lazarovici said....
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