Rio Tinto CFO: Rights Issue Larger Than Planned, Mkts Improved
June 04 2009 - 10:58PM
Dow Jones News
Rio Tinto Plc's (RTP) Chief Financial Officer Guy Elliott Friday
said the miner's recapitalization via a US$15.2 billion rights
issue, larger than originally planned, will give it greater
flexibility for its asset sale program.
It will also allow the Anglo-Australia miner to increase capital
spend during 2009 from an originally announced US$4 billion,
Elliott said during an analyst call.
Rio announced the rights issue Friday, and at the same time
called off a US$19.5 billion deal with its largest shareholder
Aluminum Corp. of China, or Chinalco. The company also announced a
non-binding agreement with BHP Billiton Ltd. (BHP) to form a 50/50
joint venture for its Pilbara iron ore assets.
Elliott stressed that the Pilbara JV would cover production
only, not marketing.
The combination of Rio's and BHP's Australian iron ore assets
was the biggest stumbling block in obtaining European Union
competition regulator approval for BHP's failed takeover offer for
its smaller rival.
"Marketing is going to be separate. This is a production union
only. We would hope that regulators recognize that," Elliott
said.
-By Elisabeth Behrmann, Dow Jones Newswires;
61-2-8272-4689 elisabeth.behrmann@dowjones.com