London pre-open: Miners to take centre stage

5th Jun 2009 07:38

The mining sector is likely to be in focus in early dealings after Rio Tinto launched a $15.2bn rights issue. Footsie is expected to open up 35 points.Rio Tinto this morning confirmed it had scrapped its controversial $19.5bn refinancing deal with Chinese firm Chinalco and instead launched a $15.2bn rights issue and a merger of its West Australia iron ore assets with those of bitter rival BHP Billiton.Terms of the rights are 21 New Rio Tinto plc Shares for every 40 existing shares at 1,400 pence per share, a 48% discount, and 21 New Rio Tinto Limited Shares offered for every 40 existing shares at A$28.29 each.Rio said the cash call would enable it to meet its Alcan facility debt repayment obligations fully in 2009 and substantially in 2010. As a result, net debt will be reduced to approximately $23.2bn; exceeding the commitment made in December 2008 to reduce net debt by $10bn by the end of 2009.Carphone Warehouse reiterated its 2010 full-year guidance and said it will split itself into two separately listed companies by July next year. The group also reported full-year results. Headline pre-tax profits came to £133m in the year ended 31 March compared with £4m last time on sales of £1,385m from £1,424m previously.Housebuilder Bellway said the southern based divisions have experienced a marginally stronger market and will see higher turnover by the year end than the northern based divisions whose markets still remain fragile. The group said net reservations since 1 February have continued to average 105 per week, securing the volume target of 4,200 homes.Oil explorer BG Group announced that another well in the pre-salt Santos Basin, offshore Brazil, has encountered hydrocarbons. A wireline test confirmed the presence of light oil located at depths of around 5 000 meters. Drilling is ongoing at the well, which is located around 250 km offshore from Rio de Janeiro and 33 km northwest of the Tupi well.SThree, the specialist staffing business, experienced an overall decline in demand for its services in the six months to May, particularly for permanent placements with contract hiring proving somewhat more resilient in all territories. Group gross profit in the period declined by circa 9% year on year to £93m (2008: £102.5m), reflecting a significant decline in volume being partially mitigated by further value improvement.