Chinalco Maintains Stake In Rio Tinto

MELBOURNE, Australia (AP) -- State-controlled Aluminum Corp. of China said Thursday it took up its full entitlement in Rio Tinto's $15.2 billion share issue to maintain a 9.3 percent stake in the Anglo-Australian miner.

There had been speculation that the Chinese company, better known as Chinalco, might not subscribe to the share offer after Rio Tinto Ltd., the world's third-largest mining company, last month abandoned a $19.5 billion deal with Chinalco.

But Chinalco, the miner's largest shareholder, said it had chosen to fully participate in the share issue from Rio Tinto PLC, the British-listed entity of the miner.

"Chinalco can confirm that it has taken up all its rights in Rio Tinto PLC," Chinalco said in a statement.

The offer, known as a rights issue, gave existing shareholders the right to buy new Rio Tinto shares, which the miner was selling as part of efforts to repair its balance sheet. Not participating in the rights issue would reduce a shareholder's stake in the company.

After taking up the rights, Chinalco has a $15 billion total investment in Rio Tinto, maintaining its 9.3 percent stake in the miner.

Money raised by the Rio Tinto rights issue will be used to pay down the group's $38.7 billion of debt, mostly incurred by its takeover of Canadian aluminum giant Alcan Inc. in 2007.

Rio Tinto on Thursday announced it had received valid acceptances for nearly 509 million new Rio Tinto PLC shares at 1,400 pence per share, a deep discount to market rates.

Almost 97 percent of the total shares offered by Rio Tinto PLC were accepted, with underwriters taking up the balance.

On the Australia market, Rio Tinto shares edged up 0.3 percent Thursday to 51.75 Australian dollars ($41.61).

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