Friedland Steps Down From CEO Post And Board At Ivanhoe, After Rio Tinto Deal
April 18 2012 - 9:22AM
Dow Jones News
Ivanhoe Mines Ltd. (IVN) founder Robert Friedland resigned as
chief executive and as a director of the company as part of a
sweeping agreement with majority shareholder Rio Tinto PLC (RIO)
that ensures Rio Tinto's support for a series of funding measures
for Ivanhoe's massive Oyu Tolgoi mining project in Mongolia.
Friedland stepped down Tuesday, as did the other members of the
senior management, Ivanhoe said in a statement. The move ends a
months-long tussle between Friedland and mining giant Rio Tinto
over control of the company. Rio Tinto has gradually increased its
stake in the miner, recently taking majority control.
The company said Rio Tinto will give its full support to
completion of a project-finance package of $3 billion to $4 billion
to be provided by third-party lenders. Ivanhoe and Rio now aim to
complete a project-finance arrangement for Oyu Tolgoi by the end of
this year.
As part of the deal, Rio Tinto will provide an immediate,
additional bridge-funding facility of up to $1.5 billion to help
ensure that construction of the first phase of the project
progresses as planned. That phase was 77.9% complete at the end of
March, it noted.
Ivanhoe will go ahead with a rights offering to holders of its
common shares to raise up about $1.8 billion in gross proceeds as
part of the pact with Rio Tinto. The rights offering will be
supported by a standby commitment for the full amount from Rio
Tinto, or a member of the Rio Tinto Group.
Meanwhile, Ivanhoe has agreed to cut the size of its board by
one director to 13. Seven existing directors, including Friedland,
have resigned, to be replaced by six Rio Tinto nominees, four of
whom are independent.
Kay Priestly, who is chief financial officer of Rio Tinto's
copper group, will act as Ivanhoe's interim chief executive.
-By Carolyn King, Dow Jones Newswires; 416-306-2100;
carolyn.m.king@dowjones.com
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