Flush with cash, Vancouver mining giant Teck Resources Ltd. (TSX:TCK.B) said it plans to buy back and cancel up to US$650 million in senior debt.
The various notes it plans to purchase include its 10.75% senior secured notes due 2019, its 10.25% senior secure notes due 2016 and its 9.75% senior secured notes due 2014 at a purchase price determined by a modified Dutch auction.
Debt holders who plan to tender their notes to the deal have until December 16, unless the offer is extended, although those that tender their notes by December 1 will receive an early participation payment of US$30 for each US$1,000 note tendered.
The company said it expects to record an accounting charge between US$185 million to US$295 million in the fourth quarter if all US$650 million of debt is purchased.
On Wednesday, Teck also announced it increased its dividend 50% to $0.30 per share due to its confidence about its balance sheet strength and its ability to fund its projects. In its third quarter, Teck reported revenue of $2.5 billion, up from $2.1 billion, although its net profit fell to $355 million from $602 million due to spending $400 million related to its debt repurchase premium and refinancing fees.
For the nine-month period ending September 30, Teck’s revenue rose to $6.5 billion from $5.5 billion. Net income rose to $1.58 billion from $1.38 billion.
Teck’s share price range during the past week: between $48.16 and $50.35; 52-week high: $51.32; 52-week low: $30.25.