UPDATE: Chinalco: Considering Participating In Rio Rts Issue
June 11 2009 - 7:35AM
Dow Jones News
Aluminum Corp. of China, or Chinalco, said Thursday it is
considering participating in the US$15.2 billion rights issue
planned by Rio Tinto PLC (RTP) and BHP Billiton Ltd. (BHP).
"We haven't made a final decision," Chinalco President Xiong
Weiping told reporters at his first news briefing since Rio ended
its planned $19.5 billion alliance with Chinalco last week.
"We will pay close attention to Rio's rights issue, as Rio's
largest single shareholder," Xiong told reporters. "I am positive
about Rio's value in the long run," he added.
"We will also be paying close attention to the Rio-BHP joint
venture."
Xiong reiterated he is "very disappointed" over the collapse of
the deal with Rio and said all cooperation plans related to the
planned alliance were terminated after the deal fell apart. The
companies had planned to set up an alumina smelter and bauxite
projects in Australia.
Chinalco will continue to look for overseas investment
opportunities, Xiong said.
At the briefing, Xiong detailed Chinalco's efforts to head off
the collapse of the largest deal in China's corporate history.
Chinalco made "tremendous efforts" to keep the deal alive, Xiong
said, adding that the company would have been willing to halve its
shareholding in Rio and its stake in Rio's Hamersley iron ore
operations to ease shareholder pressure on the deal.
He also said the companies had a dispute over board seats.
"Chinalco wanted to have seats on the board at Rio, we think
this could have provided a good foundation for our cooperation,
however we failed to reach agreement on this," he said.
Xiong denied a report in the Australian Financial Review that
Rio offered Chinalco a stake of 5%-10% in its planned iron ore
alliance with BHP Billiton following the collapse of its deal with
the Chinese firm.
"We didn't receive any proposal on this," said Xiong.
-Juan Chen and Shai Oster contributed contributed to this story;
Dow Jones Newswires; 8610 6588 5848; juan.chen@dowjones.com