MELBOURNE Jan 15 Fortescue Metals Group
will pay off $1.64 billion on its bonds in March, up to
two years ahead of maturity, slashing debt as fast as possible
while iron ore prices remain strong, the world no.4 iron ore
miner said on Wednesday.
With the latest pay down, its gross debt will fall to $9.6
billion from a peak of $12.7 billion, racked up as it expanded
iron ore capacity to 155 million tonnes a year to become a major
supplier behind Brazil's Vale, Rio Tinto
and BHP Billiton .
"The substantial increase in production and strong market
conditions have strengthened our balance sheet and enabled us to
accelerate our debt reduction program," Fortescue Chief
Executive Nev Power said in a statement.
The faster debt repayments come just as iron ore prices have
slipped below the $130-$140 a tonne range for the first time in
Fortescue said it would redeem $1.04 billion remaining on
its senior unsecured notes due in 2015 and $600 million due in
2016 by March 14, 2014. The repayments would reduce net debt to
The miner also repaid an initial $1 billion on the 2015 debt
last November. The moves to cut debt and reprice high-cost debt
will save Fortescue $300 million a year in interest payments and
lower its gearing towards 40 percent.
Power told Reuters in November that Fortescue wanted to cut
its gearing to the 30-40 percent range before it considers
raising its dividend payout.
Fortescue shares rose 3.3 percent to A$5.32, outpacing a 0.8
percent rise in the broader market.