Freeport-McMoRan Formally Cancels Plans to Take Oil-and-Gas Business Public

By Maria Armental 

Freeport-McMoRan Inc., hard hit by the commodities market rout, has formally canceled plans to take its oil-and-gas business public.

The largest U.S. mining company by market value, which had filed last year to take Freeport-McMoRan Oil & Gas Inc. public, previously had indicated it was considering a possible sale or joint venture for the business that helped push it to a $4.2 billion loss in the latest quarter.

At the same time it posted the loss, Freeport in April said it would slash about 25% of its oil-and-gas workforce in a restructuring.

The formal withdrawal of the initial public offering comes just two weeks after the company, which has been under pressure to cut its debt burden, said it had agreed to sell its stake in an African copper operation to China Molybdenum Co., a mining-and-processing concern, for $2.64 billion.

The company agreed in October with activist investor Carl Icahn, one of Freeport's biggest shareholders, on a number of issues.

He had pushed the company to cut its debt, spending and executive compensation. Under the deal, two Icahn affiliates were added to Freeport's board. Freeport-McMoRan's debt stood at $20.8 billion at the end of the first quarter.

Mr. Icahn disclosed his 8.5% stake in the miner last summer.

The Phoenix-based miner, which made an ill-timed bet on oil and gas in 2013, has been aggressively selling assets and slashing spending, including suspending dividend payouts and laying off workers in the past year.

Its longtime chairman, James R. Moffett, an oil wildcatter who helped build Freeport into a commodities powerhouse, agreed to step down last year.

Freeport's shares, down 47% over the past 12 months, edged down to $11.04 in after-hours trading.

Write to Maria Armental at [e-mail]

(END) Dow Jones Newswires

May 20, 2016 18:01 ET (22:01 GMT)

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