Freeport-McMoRan Announces Mandatory Redemption of Gold-Denominated Preferred Stock

Strategic Insights -

Freeport-McMoRan Copper & Gold Inc. has announced the redemption of its Gold-Denominated Preferred Stock (FCX Pr C), with a total redemption value of $236.3 million. The redemption is scheduled to take place on February 1, 2006, and will result in a reduction of the company's total consolidated debt by $167.4 million.

Key Takeaways:

  • The redemption will take place on February 1, 2006, for a total value of $236.3 million.
  • The redemption price is $54.892 per depositary share, equal to 0.10 times the average London P.M. gold fixing price from January 30, 2006.
  • The redemption will reduce FCX's total consolidated debt by $167.4 million and will impact net income by $36.6 million in the first quarter of 2006.
  • Registered holders of depositary shares can receive the redemption amount plus accrued and unpaid dividends by delivering a transmittal form and certificates to Mellon, the redemption agent.
  • The distribution of cash proceeds from the mandatory redemption will be a taxable event, and depositary shareholders are advised to consult their tax advisors.

Statistics:

  • Total redemption value: $236.3 million
  • Number of depositary shares outstanding: 4.3 million
  • Redemption price per depositary share: $54.892
  • Total debt reduction: $167.4 million
  • Impact on net income: $36.6 million

Sources:

  • Freeport-McMoRan Copper & Gold Inc. press release (February 1, 2006)
  • NYSE: FCX (Gold-Denominated Preferred Stock) information