Deal With Chinese Company May Provide Cash Infusion For Rio Tinto
The Wall Street Journal (2/12, Cimilluca) reports, "Ailing mining giant Rio Tinto is set to disclose Thursday a landmark $19.5 billion cash infusion from Aluminum Corp. of China, a deal that would infuse the debt-laden mining company with the largest-ever corporate investment by a Chinese company." An executive said that the Chinese company "was set to hold a joint briefing with Rio Tinto Thursday in Australia and will soon sign the deal." According sources, the Chinese company, also known as Chinalco, "would make a $7.2 billion investment in bonds that convert into Rio Tinto shares at prices well above Rio's current share prices in London and Australia. Chinalco would also invest $12.3 billion in Rio Tinto iron-ore, copper and aluminum assets under terms of the deal," sources explain.
The AP (2/12) adds, "Rio Tinto confirmed Wednesday that it is in talks about a possible transaction with Aluminum Corp. of China." In February, "Rio Tinto said it was negotiating with Chinalco about the Chinese company buying minority stakes in some of its operations - a move that could provide a big capital injection as the mining giant struggles to pay down its debts." The Financial Times (2/12, Saigol, Bream) also covers the story.