Cliffs Natural Resources commences restructuring process at Bloom Lake mine

27 January 2015 (Last Updated January 27th, 2015 18:30)

Cliffs Natural Resources has announced that Bloom Lake General Partner and some of its affiliates, including Cliffs Québec Iron Mining, have begun restructuring proceedings in Montreal, Québec.

Cliffs Natural Resources has announced that Bloom Lake General Partner and some of its affiliates, including Cliffs Québec Iron Mining, have begun restructuring proceedings in Montreal, Québec.

Proceedings have commenced under the Companies' Creditors Arrangement Act (Canada) (CCAA).

Recently, the Bloom Lake Group had suspended operations and has been exploring options to sell certain of its Canadian assets for several months.

The decision to seek protection under the CCAA was taken after analysing legal and financial analysis of the options available to the Bloom Lake Group, which is no longer generating any revenues.

"We support the decision by the directors of the Bloom Lake Group to conduct a restructuring process under the supervision of the court."

Addressing the group's immediate liquidity issues, the initial CCAA order will permit it to preserve and protect its assets for the benefit of all stakeholders, while restructuring and sale options are explored.

The court is said to have appointed FTI Consulting Canada as part of the CCAA process to monitor the activities of the Bloom Lake Group and provide assistance to the company, as well as its stakeholders.

Cliffs Natural Resources chairman of the board, president and CEO Lourenco Goncalves said: "For several months, we have been seeking equity investors and exploring sale options for Bloom Lake, including working collaboratively with Investissement Québec.

"We support the decision by the directors of the Bloom Lake Group to conduct a restructuring process under the supervision of the court."

In November 2014, the company said that it was exploring options to exit from Bloom Lake operations following a continued slump in iron ore prices.

Cliffs Natural Resources acquired the mine in 2011 and took a $6bn writedown, mostly related to Bloom Lake operations, according to Bloomberg.