Teck Sells Minority EVR Stake to Nippon Steel, POSCO for $1.7B
Ticker: TCKRF · Form: 6-K · Filed: Jan 4, 2024 · CIK: 886986
| Field | Detail |
|---|---|
| Company | Teck Resources Ltd (TCKRF) |
| Form Type | 6-K |
| Filed Date | Jan 4, 2024 |
| Risk Level | low |
| Pages | 1 |
| Reading Time | 1 min |
| Sentiment | bullish |
Complexity: simple
Sentiment: bullish
Topics: asset-sale, divestiture, cash-infusion, joint-venture
Related Tickers: TECK.A, TECK.B, GLNCY
TL;DR
**Teck just cashed in $1.3B from selling part of its coal business, big win!**
AI Summary
Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK) announced on January 3, 2024, the completion of selling a minority stake in its steelmaking coal business, Elk Valley Resources (EVR). Nippon Steel Corporation (NSC) acquired a 20% interest in EVR, paying Teck US$1.3 billion in cash at closing and an additional US$0.4 billion from EVR's cash flows, in exchange for its previous 2.5% interest in Elkview Operations. POSCO also exchanged its 2.5% interest in Elkview Operations and 20% interest in the Greenhills joint venture for a 3% interest in EVR. This matters to investors because it brings in significant cash for Teck and simplifies its ownership structure in the coal business, potentially funding other projects or returning capital to shareholders.
Why It Matters
This transaction provides Teck Resources with a substantial cash infusion of US$1.3 billion upfront, which can be used for debt reduction, capital expenditures, or shareholder returns, while also streamlining its steelmaking coal business ownership.
Risk Assessment
Risk Level: low — The filing reports a completed transaction that brings in significant cash for Teck, reducing financial uncertainty rather than introducing new risks.
Analyst Insight
A smart investor would view this as a positive step for Teck, providing significant capital and simplifying its business, potentially leading to increased shareholder value or strategic investments. Monitor the progress of the remaining sale to Glencore.
Key Numbers
- US$1.3 billion — cash paid at closing (paid by Nippon Steel Corporation to Teck Resources Limited)
- US$0.4 billion — subsequent cash flow payment (to be paid to Teck Resources Limited out of cash flows from EVR by Nippon Steel Corporation)
- 20% — interest acquired by NSC (Nippon Steel Corporation's stake in Elk Valley Resources)
- 3% — interest acquired by POSCO (POSCO's stake in Elk Valley Resources)
- 2.5% — prior interest in Elkview Operations (exchanged by both Nippon Steel Corporation and POSCO)
- 20% — prior interest in Greenhills joint venture (exchanged by POSCO)
Key Players & Entities
- Teck Resources Limited (company) — registrant and seller of minority interest
- Nippon Steel Corporation (company) — buyer of 20% interest in Elk Valley Resources
- POSCO (company) — exchanged interests for a 3% stake in Elk Valley Resources
- Elk Valley Resources (company) — Teck's steelmaking coal business
- Amanda R. Robinson (person) — Corporate Secretary for Teck Resources Limited
- Glencore (company) — expected buyer of the remaining 77% interest in EVR
Forward-Looking Statements
- Teck Resources will use the cash proceeds from this sale to reduce debt or fund other strategic projects. (Teck Resources Limited) — medium confidence, target: 2024-12-31
- The full sale of Elk Valley Resources to Glencore will proceed as planned, further simplifying Teck's business structure. (Glencore) — high confidence, target: 2024-12-31
FAQ
What was the total cash consideration Teck Resources Limited received or is expected to receive from Nippon Steel Corporation for the minority interest in Elk Valley Resources?
Teck Resources Limited received US$1.3 billion in cash at closing from Nippon Steel Corporation and is expected to receive an additional US$0.4 billion from EVR's cash flows, totaling US$1.7 billion.
What specific assets did POSCO exchange to acquire its 3% interest in Elk Valley Resources?
POSCO exchanged its 2.5% interest in Elkview Operations and its 20% interest in the Greenhills joint venture for a 3% interest in Elk Valley Resources.
When was the completion of the sale of the minority interest in Teck's steelmaking coal business announced?
The completion of the sale was announced on January 3, 2024, as stated in the press release included in the filing.
What percentage interest did Nippon Steel Corporation acquire in Elk Valley Resources?
Nippon Steel Corporation acquired a 20% interest in Elk Valley Resources.
Who is expected to acquire the remaining 77% interest in Elk Valley Resources?
The filing states that the closing of the sale of the remaining 77% interest in EVR is to Glencore.
Filing Stats: 155 words · 1 min read · ~1 pages · Grade level 12.1 · Accepted 2024-01-03 18:33:27
Filing Documents
- eh240435076_6k.htm (6-K) — 12KB
- eh240435076_ex9901.htm (EX-99.1) — 12KB
- header.jpg (GRAPHIC) — 14KB
- 0000950142-24-000032.txt ( ) — 44KB
From the Filing
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of January 2024 Commission File Number: 001-13184 TECK RESOURCES LIMITED (Exact name of registrant as specified in its charter) Suite 3300 – 550 Burrard Street Vancouver, British Columbia V6C 0B3 (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F Form 40-F EXHIBIT INDEX Exhibit Number Description 99.1 Press Release dated January 3, 2024 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Teck Resources Limited (Registrant) Date: January 3, 2024 By: /s/ Amanda R. Robinson Amanda R. Robinson Corporate Secretary 3