logo
Plus   Neg
Share
Email

Rio Tinto Accepts Offer For Extract; Rio Tinto Finance Prices $2.5 Bln Of Bonds

Anglo-Australian mining giant Rio Tinto Plc./Ltd. (RIO, RIO.AX,RIO.L) agreed Monday to sell its minority stake in Extract Resources Ltd. (EXT.AX). However, it remains open to joint-venture to develop the Australian uranium explorer's Husab project in Namibia. The project has a new owner in China Guangdong Nuclear Power Corp. or CGNPC, and partner China-Africa Development Fund or CADF, who are acquiring the stake.

Rio Tinto has a 14.22 percent minority stake in Extract Resources as its Rossing uranium unit holds 35.71 million of its shares. The Rossing board has accepted the recommendation of the Extract Resources board to accept the CGNPC offer.

CGNPC will hold the shares in Extract Resources bought from Rossing through its bidding vehicle, Taurus Mineral Ltd., a company formed by CGNPC and CADF. Taurus is said to have offered A$8.65 per share for the stake, which values Extract Resources at about A$2.2 billion.

Taurus Mineral has reportedly acquired more than 64 percent interest in Extract Resources until the end of last week.

Meanwhile, Rossing Uranium Ltd. said it remains interested in pursuing a joint development with the new owners of Husab.

"We believe that a joint development of the Husab deposit with Rossing would bring benefits to the shareholders of both Rossing and Husab, the local community and Namibia," Rossing Managing Director Chris Salisbury said in a statement.

Separately, Rio Tinto said it has priced $2.5 billion of fixed rate bonds in four tranches, which will be issued by Rio Tinto Finance (USA) Ltd. The bonds, guaranteed by Rio Tinto plc and Rio Tinto Ltd, will have a weighted average coupon of 2.97 percent and a weighted average maturity of 11.6 years.

"The offering comprises US$500 million of three-year, US$500 million of five-year, US$1 billion of 10-year and US$500 million of 30-year SEC-registered debt securities," Rio Tinto said in a statement.

Citigroup, Credit Suisse, Deutsche Bank and JP Morgan acted as joint bookrunners for the issue.

This U.S. fund raising comes six months after Rio Tinto had raised $2.0 billion by selling $500 million of five-year debt, $1.15 billion of 10-year debt and $350 million of 30-year debt last year in September in the U.S.

In mid-May 2011, the company sold $700 million of 5-year, $1 billion of 10-year and $300 million of 30-year SEC-registered securities in the U.S.

RIO closed Monday's regular trading session at $57.15, up $0.33 or 0.58% on a volume of 2.69 million shares.

by RTTNews Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
The Boeing Company (BA) reported that its first-quarter core earnings per share increased to $3.64 from $2.17, prior year, reflecting strong performance across the company. Core operating earnings improved 35% year-over-year to $2.51 billion from $1.86 billion, previous year. GAAP earnings from operations increased 30% to $2.88 billion. Net earnings improved 57% year-over-year to $2.48 billion. Earnings per share was $4.15 compared to $2.54. Operating cash flow was $3.1 billion for the quarter. Micro-blogging site Twitter Inc. on Wednesday reported a turnaround to profit in the first quarter on strong double-digit revenue growth. This is the company's second quarterly profit. Both revenue and adjusted earnings per share beat analysts' estimates. Twitter's average monthly active users or MAU figure rose 3 percent year-over-year and also increased from the preceding quarter. Shares of Credit Suisse Group AG were gaining around 4 percent in Swiss trading after the banking giant reported Wednesday higher profit in its first quarter, despite lower net interest income. The company said it had planned 2018 to be a year of acceleration in its performance in its 12-quarter restructuring program.
Follow RTT