A senior official at Aluminum Corp of China (Chinalco) has dismissed efforts by Rio Tinto shareholders to secure changes in Chinalco’s proposed US$19.5 billion investment in the Anglo-Australian mining giant. Wang Wenfu, president of Chinalco Overseas Holdings, told the Financial Times that Chinese firm’s investment was a package deal that couldn’t just be pulled apart. As part of the proposed deal, Chinalco would buy US$7.3 billion in convertible bonds that would ultimately increase its equity stake in Rio from 9% to 18%. Critics argue that this ignores existing shareholders’ preemptive rights to refinance the company without their stakes being diluted. The recent resurgence in Rio shares has also led to renewed questions about the Chinalco deal, although Wang warned that markets are volatile. Chinalco, he said, can offer certainty and a package of solutions to address Rio’s debt needs. Malcolm Turnbull, leader of Australia’s federal opposition, last week launched a stinging attack on the deal.
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