Rio Tinto’s proposal to sell roughly one-fifth of the company to Chinese government-owned Chinalco collapsed this week. According to the Guardian, Rio Tinto is out roughly $1 billion dollars as a result of the failed deal. The deal would have given the Chinese company access to some of Rio Tinto’s key assets, including Kennecott Utah Copper and the company’s prized Australian iron ore operations.
Rio Tinto is now opting for a rights issue in an effort to pay off nearly $40 billion in debt incurred when the company purchased aluminum giant, Alcan, in 2007 and is also forming a western Australia iron ore joint venture with BHP-Billiton. Both companies have extensive iron ore operations in the region. Prior to China’s pursuit of Rio Tinto, BHP attempted to purchase its rival outright but was rebuffed by the Rio Tinto board and CEO Tom Albanese. Some analysts are expecting Albanese to lose his job due to his efforts to close the unpopular deal.
Although news of Rio Tinto’s changed plans has been received well by most shareholders, the Independent is reporting that the company may suffer strategic repercussions for rebuffing China’s overture.
LSMN
Eve Divine
doncorvette
[...] company to Chinalco, in order to pay off debt, Rio met with intense shareholder opposition and was forced to back out of the highly-publicized deal. In response, Chinese officials expressed dissatisfaction, going to far as to compare Rio Tinto [...]
Well at least its in the same hphmseiere and the climate is warmer (in the most part) than England and Europe.There are also wide open spaces and wild land still so sounds like quite a good option to consider.
[...] company to Chinalco, in order to pay off debt, Rio met with intense shareholder opposition and was forced to back out of the highly-publicized deal. In response, Chinese officials expressed dissatisfaction, going so far as to compare Rio Tinto [...]