Teck shortens coal exit timeline as fossil fuel exposure dominates merger talks
Teck Resources Ltd. offered shareholders an earlier exit from exposure to the company’s coal business, as the issue of turning Teck into a greener miner takes centre stage in the takeover battle between the company’s management and Swiss commodities giant Glencore Plc.
In February, Teck announced a plan to separate its copper and coal assets by dividing itself into two publicly listed entities: Teck Metals and Elk Valley Resources (EVR). Shareholders are set to vote on the proposal later this month.
The initial plan was for the metals company to utilize cash flow from Elk Valley through a royalty paid by EVR to Teck Metals for a minimum term of about 5.5 years. However, that relationship undermined the scheme’s main selling point, which is to give shareholders and future investors an opportunity to make a clean break from fossil fuels.
Teck said April 13 that it revised its breakup plan and reduced the minimum term of the royalty from approximately 5.5 years to three years. “We believe these amendments will enhance certainty and further protect the interests of Teck Metals shareholders,” Teck’s chief executive Jonathan Price, said in a statement.
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