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Chinalco said to take full Rio rights
By Eadie Chen |
July 1, 2009, Wednesday
|
Print Edition
Print Edition
CHINALCO, as Aluminum Corp of China is known, is taking up its full entitlement to Rio Tinto's US$15.2-billion share issue, media reports said yesterday, with trade in the rights suggesting Chinalco is far from severing its ties with the Anglo-Australian miner.
Agricultural Bank of China, one of the nation's big four banks, will offer part of the funds Chinalco needs to buy Rio Tinto's new shares, Caijing Magazine cited an unnamed source from the bank as saying.
Both the Financial Times and Daily Telegraph reported that Chinalco was set to take up all its rights, at a cost of about 880 million pounds (US$1.46 billion), to keep its stake in Rio Tinto's London-listed stock at about 12 percent.
Chinalco's relations with Rio soured early last month when the indebted miner called off a bigger equity partnership that would have seen the Chinese group invest another US$19.5 billion into dual-listed Rio Tinto.
Instead, Rio ditched the deal in favor of the rights issue and an iron ore joint venture with rival BHP Billiton, raising howls of protest from China where media characterized Rio as a "dishonorable woman."
"Chinalco has decided to participate in Rio Tinto's share issue. ABC and China Development Bank will offer it the loans," the banking source told Caijing.
Lu Youqing, vice president of Chinalco, also told Caijing his company had made up its mind on whether to buy Rio's rights, but declined to elaborate as this was market sensitive information.
Chinalco's 12 percent of Rio's London shares give it about 9 percent of the overall group. It bought the stake in February last year, near the peak of the market, at 60 pounds per share in a raid on the London-listed stock.
Agricultural Bank of China, one of the nation's big four banks, will offer part of the funds Chinalco needs to buy Rio Tinto's new shares, Caijing Magazine cited an unnamed source from the bank as saying.
Both the Financial Times and Daily Telegraph reported that Chinalco was set to take up all its rights, at a cost of about 880 million pounds (US$1.46 billion), to keep its stake in Rio Tinto's London-listed stock at about 12 percent.
Chinalco's relations with Rio soured early last month when the indebted miner called off a bigger equity partnership that would have seen the Chinese group invest another US$19.5 billion into dual-listed Rio Tinto.
Instead, Rio ditched the deal in favor of the rights issue and an iron ore joint venture with rival BHP Billiton, raising howls of protest from China where media characterized Rio as a "dishonorable woman."
"Chinalco has decided to participate in Rio Tinto's share issue. ABC and China Development Bank will offer it the loans," the banking source told Caijing.
Lu Youqing, vice president of Chinalco, also told Caijing his company had made up its mind on whether to buy Rio's rights, but declined to elaborate as this was market sensitive information.
Chinalco's 12 percent of Rio's London shares give it about 9 percent of the overall group. It bought the stake in February last year, near the peak of the market, at 60 pounds per share in a raid on the London-listed stock.
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