Rio Tinto sells Alcan arm for $1.2bn

6th Jul 2009 07:28

Mining giant Rio Tinto has further cut its debt pile with the sale to US packaging firm Bemis of the US food packaging division of aluminium subsidiary Alcan fro $1.2bn.Bemis will pay a consideration of $1bn in cash and $200m in shares. Australian packaging Amcor, meanwhile, has said it is interested in other parts of the Alcan food business with interest also coming from New Zealand.Rio recently raised $15.2bn through a rights issue to slash its debts of $38.7bn. It had already earmarked the Alcan Packaging Food Americas division as a disposal candidate. Most of Rio's debt was taken on when it bought Alcan for $38bn at the end of 2007.Rio added that the remainder of Alcan's non-aluminium assets were still for sale with their book value likely to be written down. So far this year, Rio Tinto has announced a total $3.7bn in asset sales."The sale of the Food Americas division is the first significant step in reducing the asset portfolio acquired with Alcan," Rio Tinto Chief Financial Officer Guy Elliott said in a statement.