Fording and Teck Cominco agree significant synergies achieved
21 Luglio 2004 - 4:16AM
PR Newswire (US)
Fording and Teck Cominco agree significant synergies achieved
CALGARY, July 20 /PRNewswire-FirstCall/ -- Fording Canadian Coal
Trust (TSX: FDG.UN, NYSE: FDG) and Teck Cominco Limited (TSX: TEK.A
and TEK.B) today announced their agreement that significant
synergies have been achieved by Elk Valley Coal Partnership
following its formation in February 2003. As a result, Teck
Cominco's current 35% interest in Elk Valley Coal will increase to
40% over three years. During this period, the Trust's unitholders
will continue to benefit from the synergies achieved to date and
those that are anticipated to be realized going forward. As such,
the level of distributions to the Trust's unitholders should not be
materially affected solely as a result of the change in the
respective levels of interest in Elk Valley Coal. The agreement
governing Elk Valley Coal provides that Teck Cominco may increase
its interest in the partnership to a maximum of 40% to the extent
that synergies from the combination of various metallurgical coal
assets contributed to the partnership exceed certain target levels.
The report of an independent expert engaged by the partners
concluded that sufficient synergies had been realized such that
Teck Cominco's interest in the partnership should be increased to
40%. Teck Cominco and the Trust have reviewed the expert's report.
The Trust established an independent special committee of the board
of directors of Fording Inc., the Trust's wholly owned subsidiary,
to assess the synergies achieved and the likelihood that additional
synergies would be realized. It recommended that the best interests
of Fording Inc. and the unitholders of the Trust would be served if
Teck Cominco receives its additional interest in Elk Valley Coal
over the next two years. The recommendation of the independent
special committee follows an extensive review and analysis of the
issue, including advice from independent engineering, financial,
accounting and legal advisors. Teck Cominco and the Trust have
agreed that the Trust's interest in Elk Valley Coal will be reduced
to 62% effective April 1, 2004, 61% effective April 1, 2005 and 60%
effective April 1, 2006 and Teck Cominco's interest will be
correspondingly increased. The latter two reductions are
conditional on Teck Cominco being the Managing Partner at the
effective date of the reductions. "The combination of these
businesses and management expertise is producing the positive
results that we expected and hoped for," said Mr. Michael Grandin,
Chairman and Chief Executive Officer of the Fording Canadian Coal
Trust. "We believe that continuing value enhancements for
unitholders created by tightly focused management of these world
class assets will more than offset the reduction of our interest in
Elk Valley Coal." Mr. David Thompson, Deputy Chairman and Chief
Executive Officer of Teck Cominco said: "Management of Elk Valley
Coal Partnership has worked hard to create substantial synergies in
areas of production integration, capital spending, transportation
logistics and many other areas of opportunity." As part of the
review process, Fording Inc.'s independent special committee
consulted with Ontario Teachers' Pension Plan given their key
involvement in the negotiations resulting in the creation of the
Elk Valley Coal Partnership and the synergies adjustment. Mr. Brian
Gibson, Senior Vice-President, Global Active Equities of OTPP said:
"We are very pleased with this agreement on synergies and are
confident that it reflects both the significant progress that has
been achieved to date as well as the continuing commitment of the
partners to maximize the value of the combined assets." As a result
of the change in its interest, the Trust will record a reduction of
net assets and an equivalent non-cash charge to earnings equal to
the proportionate decrease in its interest in the net assets of Elk
Valley Coal, which will be discussed in the 2004 Second Quarter
News Release. 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., currently holds
a 62% 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. Teck Cominco is a
diversified mining company, headquartered in Vancouver, Canada with
assets totaling approximately $5.5 billion. Its shares are listed
on the Toronto Stock Exchange under the symbols TEK.A and TEK.B.
The company is a world leader in the production of zinc and
metallurgical coal and is also a major producer of copper and gold.
Certain information included in this document is of a
forward-looking nature. Forward-looking information is subject to
known and unknown risks, as well as uncertainties and other
factors. Accordingly, actual results may differ materially from
those expressed or implied in forward-looking information. Some of
the risks, uncertainties and other factors affecting Fording
Canadian Coal Trust and Teck Cominco Limited are discussed in their
respective public filings with the securities regulatory
authorities in Canada and the United States. Copies of Fording
Canadian Coal Trust's and Teck Cominco Limited's Canadian filings,
including their most recent management information circular, annual
information form, annual report, quarterly reports, material change
reports and news releases, are available online at
http://www.sedar.com/, and copies of Fording Canadian Coal Trust's
U.S. filings, including its most recent annual report on Form 40-F
as supplemented by filings on Form 6-K, are available at
http://www.sec.gov/. Information in this document is presented as
of July 20, 2004 and is subject to change after this date. However,
Fording Canadian Coal Trust and Teck Cominco Limited disclaim any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. DATASOURCE: Fording Canadian Coal Trust CONTACT:
Fording Canadian Coal Trust, Catherine Hart, Coordinator, Investor
Relations, Ph. (403) 260-9817, Email: ; Teck Cominco Limited, Tom
Merinsky, Director, Investor Relations, (604) 685-3007,
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