Chinalco maintains stake in Rio Tinto

Source: Agencies | July 3, 2009, Friday |

Print Edition

ALUMINUM Corp of China has taken up its full entitlement in Rio Tinto's US$15.2-billion share issue to maintain its 9.3-percent stake in the Anglo-Australian miner, it said yesterday.

There had been speculation that the company, better known as Chinalco, might not subscribe to the share offer after Rio Tinto Ltd last month abandoned a US$19.5-billion deal with the Chinese company.

But Chinalco, the miner's largest shareholder, said it had chosen to fully participate in the share issue from Rio Tinto Plc, the British-listed entity of the miner.

The offer, known as a rights issue, gave existing shareholders the right to buy new Rio Tinto shares, which the miner was selling as part of efforts to repair its balance sheet.

After taking up the rights, Chinalco now has a US$15 billion investment in Rio Tinto, maintaining its 9.3-percent stake.

Money raised by the rights issue will be used to pay the group's US$38.7-billion debt, mostly incurred by its takeover of Canadian aluminum giant Alcan Inc in 2007.

Rio Tinto said it had acceptances for nearly 509 million new Rio Tinto Plc shares at 1,400 pence (US$23) per share. Almost 97 percent of the shares offered were accepted, with underwriters taking up the balance.

Rio Tinto shares rose 0.3 percent to A$51.75 (US$41.61) in Australia.

Energy

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Chinalco maintains stake in Rio Tinto

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