Arrangement Structure. As with the previously proposed combination, Fording Trust will hold an interest in a coal partnership that will hold Fording's and Teck Cominco's metallurgical coal assets, and to which will be added the metallurgical coal assets of Luscar and CONSOL. The Luscar/CONSOL assets consist of the Line Creek mine, the Luscar mine, the undeveloped Cheviot deposit and a 46.4% interest in Neptune Bulk Terminals (Canada) Ltd. Fording Trust will initially hold a 65% interest in the coal partnership and 100% of Fording's industrial minerals business. Teck Cominco will contribute its metallurgical coal assets, including the Elkview mine and $125 million to the partnership for an initial 35% interest. As manager of the coal partnership, Teck Cominco will have the right to earn up to an additional 5% interest over a four-year period, bringing its interest to 40%, if the partnership achieves specified operating synergies. Teck will no longer have the right to exchange its interest in the coal partnership into units of the Fording Trust. Existing Fording shareholders, other than Teachers', will hold 18.3 million units of Fording Trust representing 38.8% of the trust. (All trust ownership percentages assume full cash election). Sherritt Coal Partnership II will invest $375 million comprised of an investment of $275 million by Teachers' and $100 million by Sherritt, and will own a 22.7% interest in Fording Trust. Because Teachers' has agreed to accept all units for its 3.2 million Fording shares, it will hold a 6.7% interest in Fording Trust directly.
Arrangement Structure
