In a further effort to repay its debts, Rio Tinto has sold the Alcan Packaging food Americas division to global packaging manufacturer Bemis Company for US$1.2 billion (around A$1.33 billion).
The sale marks the completion of Rio’s divestment proposals, which have raised US$10.3 billion (A$11.4 billion) since the beginning of 2008.
“Our balance sheet has been transformed in the past 12 months on the back of the divestment programme, the rights issues and continued strong operating cash flows,” the company’s chief financial officer Guy Elliott said.
“The recapitalisation leaves Rio Tinto well placed to consider value adding investment opportunities as they emerge.”
More than US$7 billion (A$7.8 billion) of the divestments have been completed since the start of 2009, including the sale of Alcan Packaging’s pharmaceuticals, tobacco, food Europe and food Asia divisions to Amcor early last month.
The company has now wiped around a quarter of its debt, which at the end of June last year stood at US$39.1 billion (A$43.4 billion), through divestments.
“We are pleased to welcome our newest Bemis employees and look forward to integrating these new facilities into our business,” Bemis chief executive Henry Theisen said.
“During the next two years, we expect to generate strong cash flow, which we will use to invest in growth opportunities, pay down debt and deliver attractive total returns to our shareholders.
“This acquisition complements our manufacturing capabilities and technological expertise around the world.”