Thu, June 18, 2009
Business > Industries > Chinese firms' global move

Chinalco registers for Rio Tinto rights issue

2009-06-18 02:03:53 GMT2009-06-18 10:03:53 (Beijing Time)  Xinhua English

BEIJING, June 18 -- Chinalco has registered for the $15.2-billion rights issue of global miner Rio Tinto, but the State-owned non-ferrous mineral processor has not yet made up its mind on whether it wants to participate in the world's fifth largest rights issue or not.

According to the prospectus released by Rio Tinto on Tuesday, June 15 was the registration deadline for the issue. A Chinalco insider confirmed on June 16 that the company had completed the registration process, reported by Caijing, a business magazine of China.

"Completion of the registration means our company is entitled to buy the shares at any time, but we haven't decided whether to buy them or not," the insider, who did not wish to be named, said.

According to the prospectus, Chinalco has to convey its final decision before July 1. The new shares will be transacted on the stock exchanges from July 2.

If Chinalco decides not to subscribe to the rights issue, its current 9.3 percent shareholding of Rio Tinto will be diluted and its status as the single largest shareholder will be weakened.

Rio Tinto launched the issue after terminating a $19.5-billion deal with Chinalco on June 5.

The prospectus said the right issue consists of 21 new Rio Tinto Plc shares offered for every 40 existing shares at 1,400 pence per share, and 21 new Rio Tinto Ltd shares offered for every 40 existing shares at AU$28.29 per share.

The issue aims to raise approximately $11.8 billion for Rio Tinto Plc and $3.4 billion for Rio Tinto Ltd to cut debts amounting to $38 billion.

(Source: China Daily)

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