| Freeport-McMoRan Looks to Clear Debt Woes with Public Offering | |
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Freeport-McMoRan to Offer Up Energy Assets: Will It Be Enough? (Continued from Prior Part) Energy initial public offering
Freeport-McMoRan (FCX) has filed a prospectus with the US SEC (Securities and Exchange Commission) for an IPO (initial public offering) of $100 million for its oil and gas assets.
You should note that the $100 million figure is only an indicative figure used for calculating the registration fees. The final IPO might differ from this, but we’ll have to await further details from the company to know by how much.
Debt woes
The chart above shows how Freeport-McMoRan’s net debt has increased over the last few years. You can define net debt as total debt minus cash and cash equivalents. As you can see, Freeport’s net debt was negative in 4Q 2012. This basically means that the cash on the company’s balance sheet was greater than its debt.
Freeport had to borrow heavily to acquire these energy (XLE) (XOP) assets. This increased its debt levels. Freeport’s debt ratios are currently much higher than other copper producers such as Southern Copper (SCCO) and Teck Resources (TCK).
Energy business
Freeport-McMoRan acquired its energy assets when crude oil was trading at elevated levels. The energy business was expected to enhance its earning capacity.
The energy business was expected to be self-funding over the long term. The business was expected to generate sufficient cash flow to meet its capital expenditure needs. However, crude oil prices have seen a sharp correction over the last eight months.
Freeport was planning to reduce its debt levels. Lower crude oil prices have changed the equation. It has had to defer its debt reduction targets since commodity prices fell.
Is the energy IPO in the best interests of its shareholders? We’ll discuss this in the next part of this series.
Continue to Next Part Browse this series on Market Realist:
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VanEck Vectors Global Alternative Energy ETF
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PRODUCER |
CODE : FCX |
ISIN : US35671D8570 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Freeport McMoran is a copper and gold producing company based in United states of america. Freeport McMoran produces copper, gold, cobalt, molybdenum and silver in Chile, in Congo Dem. Rep. of, in Indonesia and in Peru, develops copper in Peru, and holds various exploration projects in Chile. Its main assets in production are CANDELARIA, EL ABRA, CHINO - MILL, HENDERSON, MIAMI - ROM LEACH, MORENCI - MILL, OJOS DEL SALADO, MORENCI and MORENCI - ROM LEACH in Chile, GRASBERG, SIERRITA and BAGDAD in Indonesia, TENKE FUNGURUME and TYRONE in Congo Dem. Rep. of and CERRO VERDE in Peru, its main asset in development is SAFFORD in Peru and its main exploration properties are BAGDAD - ROM LEACH and CHINO - ROM LEACH in Peru and CERRO VERDE - MILL, CERRO VERDE - CRUSHED LEACH, CERRO VERDE - ROM LEACH, EL ABRA - ROM LEACH and CLIMAX in Chile. Freeport McMoran is listed in Germany and in United States of America. Its market capitalisation is 2.1 billions as of today (€ 1.9 billions). Its stock quote reached its lowest recent point on March 06, 2020 at 10.00, and its highest recent level on September 20, 2024 at 44.53. Freeport McMoran has 47 442 200 shares outstanding. |