Update: Chinalco takes up Rio Tinto rights

2nd Jul 2009 12:11

Chinalco, Rio Tinto's biggest shareholder, has taken up its full entitlement to the miner's $15.2bn fully underwritten rights issue.The Chinese firm, which holds 9% in Rio, spent about $1.5bn on the shares.A Chinalco spokesman told the Financial Times that the group wanted to prevent the dilution of its ownership in the Anglo-Australian miner."Chinalco believes in the long-term prospects of the industry and will continue to explore opportunities to advance its strategic objectives. Chinalco will, as the company's current largest single shareholder, continue to monitor developments at Rio," he said according to the paper.Overall, Rio Tinto shareholders took up a healthy 96.97% of the shares on offer.The group received valid acceptances in respect of 508.58m of the £7.1bn of shares available in London. Underwriters Credit Suisse and J.P. Morgan Cazenove will seek subscribers for the remaining 15.88m shares.The details of the Australian issue are not yet available.Terms of the rights were 21 New Rio Tinto 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 launched the cash call and announced a merger of its West Australia iron ore assets with those of bitter rival BHP Billiton last month after scrapping its controversial $19.5bn refinancing deal with Chinalco.