Rio may change terms

Rio Tinto may replace its $US7.2 billion Chinalco convertible bond issue with a capital raising that will be underwritten by the state-owned Chinese aluminium company, The Australian reports.

Without citing sources, The Australian said it believed that after talks with its shareholders Rio had told Chinalco changes must be made to their $US19.5 billion investment deal.

Rio’s new chairman Jan du Plessis last week met with shareholders in the U.K. in an attempt to convince investors that the deal with Chinalco is the best way to cut into its $US38.9 billion of debt.

Du Plessis is due in Australia at the end of May to hold similar talks with local shareholders.

Rio’s investors have been upset at not being given the opportunity to participate in a capital raising deal alongside Chinalco.

A spokesperson for Rio Tinto was not available for comment.

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