Fording receives draft opinion of synergies
04 Maggio 2004 - 7:05AM
PR Newswire (US)
Fording receives draft opinion of synergies CALGARY, May 3
/PRNewswire-FirstCall/ -- Fording Canadian Coal Trust (TSX: FDG.UN,
NYSE: FDG) today announced that, in accordance with the Plan of
Arrangement, it has received the draft opinion of the independent
expert engaged to assess and determine the synergies of Elk Valley
Coal Partnership for the coal year ending March 31, 2004. The
Trust's principal asset is its 65% interest in the partnership,
held through the Trust's operating subsidiary, Fording Inc. Teck
Cominco Limited and its affiliates own the remaining interest in
the partnership. The Trust's interest in the partnership can be
reduced to 60% if the partnership realizes certain synergies and/or
improves the operating results from the Elkview mine (collectively
referred to as synergies) in respect of any coal year during the
period April 1, 2003 to March 31, 2007. The draft opinion of the
independent expert indicates that sufficient synergies have been
realized such that the Trust's interest in the partnership would be
reduced to 60.2% effective April 1, 2004. The partnership agreement
allows the Trust and Teck Cominco to review and comment on the
draft opinion of the independent expert, with a final opinion to be
issued no later than June 15, 2004. If any disagreements between
the Trust and Teck Cominco arise with respect to the final opinion,
they will be subject to resolution by binding arbitration.
Accordingly, the actual change in the Trust's ownership of the
partnership will not be finalized until this review process is
completed. The board of directors of Fording Inc. has formed a
special committee comprised of directors who are independent of
Teck Cominco to oversee the consideration of the draft opinion. As
part of this process, the special committee has retained the
services of a mining engineering firm to review the draft opinion
and supporting work and to advise the committee of its findings.
The Trust's reduced interest in the distributions of the
partnership would take effect April 1, 2004, and each 1% change in
the Trust's ownership, taken by itself, is expected to reduce
distributions to unitholders by approximately 1.5% from what they
would otherwise be for the remainder of 2004. The attainment of
synergies is accretive to cash available for distribution to
unitholders from what would have been available in the absence of
achieving synergies even after taking into account the change in
the Trust's ownership of the partnership. The ultimate impact on
distributions to unitholders is being studied, but will reflect the
reduced ownership of the partnership offset, in part, by continuing
synergies. Fording Canadian Coal Trust is an open-ended mutual fund
trust. Through investments in metallurgical coal and industrial
minerals mining and processing operations, the Trust makes
quarterly cash distributions to unitholders. The Trust, through its
wholly-owned subsidiary, Fording Inc., holds a 65% ownership
interest in the Elk Valley Coal Partnership and is the world's
largest producer of the industrial mineral wollastonite. Elk Valley
Coal Partnership, comprised of Canada's senior metallurgical coal
mining properties, is the world's second largest exporter of
metallurgical coal, capable of supplying approximately 25 million
tonnes of high-quality coal products annually to the international
steel industry. DATASOURCE: Fording Canadian Coal Trust CONTACT:
Mark Gow, CA, Controller, (403) 260-9834,
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