Cliffs Natural Resources (CLF) Net Debt Unchanged Despite Coal Exit - Deutsche Bank

Deutsche Bank analyst Jorge Beristain reiterated a Sell rating and $1.50 price target on Cliffs Natural Resources (NYSE: CLF) saying while the Coal deal was in-line with USIO-centric strategy, net debt is left unchanged.

Beristain commented: "Cliffs has fully exited from coal post-sale of its remaining North American coal assets to Seneca Coal Resources on December 22. Also, the recent sale of its former Canada-based idled Bloom Lake iron ore mine via a Chapter 11-style process (CCCA) reverts focus back to its legacy US Iron Ore (USIO) operations. Cliffs continues to look for a buyer for its Asia Pacific Iron Ore (APIO) assets, but with expected end of life by 2019, will likely to continue being run for "cash". While these recent sales are in-line with company's strategy to revert back to a US-centric iron ore supplier, overall Net Debt picture remains largely unchanged, with no cash/debt involved in the coal deal ($268m coal "value" is for assumption of Liabilities and involves no cash inflow) and Bloom Lake (~$8m) proceeds go to creditors. Cliffs continues to lack financial flexibility with high debt levels and deteriorating iron ore operations."

For an analyst ratings summary and ratings history on Cliffs Natural Resources click here. For more ratings news on Cliffs Natural Resources click here.

Shares of Cliffs Natural Resources closed at $1.71 yesterday.

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