Cloud Peak Energy Inc. (NYSE:CLD) will be offering to the public common stock totaling about 13.5 million shares. The price of each share will be approximately $5.10. Underwriters have an option of 30 days to acquire common stock additional shares numbering two million. The offering is expected to be closed on February 28, 2017, once the closing conditions are satisfied.
The funds generated from the offering will be used finance redemption of senior notes that are due in 2019. Additionally, the funds will also be used to pay the unpaid and accrued interest. The balance will be used to cater to other corporate needs.
Book running managers
Jefferies, JPMorgan Chase & Co. (NYSE:JPM), and Credit Suisse Group AG (ADR) (NYSE:CS) will be the joint managers in charge of book-running. Copies of the base prospectus and prospectus supplement are obtainable from the website of the U.S. Securities and Exchange Commission. Prospective investors can also arrange with the underwriters to have the base prospectus and the prospectus supplement sent to them upon request.
With its headquarters in Wyoming, Cloud Peak Energy boasts of being one of the biggest coal producers in the United States. Besides providing logistics supply services, it is involved in mining sub bituminous coal and low sulfur. In the Powder River Basin which is the one region in the United States with the lowest costs in coal production, there are three surface coal mines that Cloud Peak Energy operates. The location of one of them, Spring Creek Mine is Montana while the other two, Cordero Rojo Mine and Antelope Mine, are located in Wyoming.
Future potential
Last year, Cloud Peak Energy’s total coal production was 59 million tons and this was shipped to customers around the globe as well as those in the United States. Other than the existing mines that are currently operational, in the northern parts of the Powder River Basin, Cloud Peak Energy has rights to assets that are currently undeveloped. There are plans to develop this to meet demand from domestic customers and customers in Asia.
On Thursday, shares of Cloud Peak Energy fell sharply by 9.68% to close the day at $5.13.
