Cliffs Natural Resources stops dividend payments
Mining and natural resources company Cliffs Resources will eliminate its dividend to reduce its debt.
Cliffs paid a $0.15 per share quarterly dividend since 2013, when the dividend was cut by 73% from $0.63 to $0.15 per share.
After the big cut Cliffs the dividend still costed the company about $90 million annually. In 2014 the stock lost almost 72%, leaving the company with a 8.4% dividend yield at the end of the year.
Now the company has decided to stop its dividend payments and focus on reducing its debt.
Lourenco Goncalves, Cliffs' Chairman of the Board, President and Chief Executive Officer, said, "Our strong performance in the fourth quarter of 2014 and the sale of Cliffs Logan County Coal which closed on December 31st allowed us to take advantage of the discounts offered in the debt markets and significantly reduce our debt. We see accelerated debt reduction as a more effective means of protecting our shareholders than continuing to pay a common share dividend. The elimination of this dividend provides us with additional free cash of $92 million annually, which we intend to use for further debt reduction." (Source: Cliffs Natural Resources).
Cliffs paid a $0.15 per share quarterly dividend since 2013, when the dividend was cut by 73% from $0.63 to $0.15 per share.
After the big cut Cliffs the dividend still costed the company about $90 million annually. In 2014 the stock lost almost 72%, leaving the company with a 8.4% dividend yield at the end of the year.
Now the company has decided to stop its dividend payments and focus on reducing its debt.
Lourenco Goncalves, Cliffs' Chairman of the Board, President and Chief Executive Officer, said, "Our strong performance in the fourth quarter of 2014 and the sale of Cliffs Logan County Coal which closed on December 31st allowed us to take advantage of the discounts offered in the debt markets and significantly reduce our debt. We see accelerated debt reduction as a more effective means of protecting our shareholders than continuing to pay a common share dividend. The elimination of this dividend provides us with additional free cash of $92 million annually, which we intend to use for further debt reduction." (Source: Cliffs Natural Resources).
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