UPDATE 4-Teck Cominco defers debt payments, shares leap

Tue Apr 21, 2009 7:38pm GMT
 

* Defers $4.4 billion in 2009 debt payments

* Stock leaps 30 percent to C$11.86

* EPS ex-items C$0.47 vs consensus C$0.43 (Add CEO and analyst comments. In U.S. dollars unless noted)

By Cameron French

TORONTO, April 21 (Reuters) - Canadian miner Teck Cominco (TCKb.TO: Quote) said on Tuesday its lenders have agreed to defer $4.4 billion in debt payments due in 2009, giving it breathing room in its attempt to pay down debt from its purchase of Fording Canadian Coal Trust, and driving its shares up by 30 percent.

The reworked financing plan, announced after Teck released first-quarter earnings, will give it some time to continue selling assets to help pay down $1.9 billion in debt still due this year, and to try to convert the bridge loan to longer-term debt, the company said.

Before the deferment, Teck had been on the hook for $6.3 billion in debt payments this year.

"It substantially diminishes (Teck's) risk profile," BMO Capital Markets analyst Tony Robson said of the agreement.

Teck borrowed $9.8 billion in total last year to pay for Fording so that it could take control of the Elk Valley Coal Partnership, one of the world's top producers of coal used in the steelmaking process.   Continued...

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