Mining giant Rio Tinto yesterday confirmed a huge take-up for its record rights offering after investors snapped up the Australian portion, allowing it to pay off a large chunk of its heavy debt.
The dual-listed firm, whose share offer came at rock-bottom prices in Sydney and London, announced a 95 percent subscription among Australian investors following a 97 percent take-up in Britain.
Rio can now slash its debt bill incurred by last year’s acquisition of Canada’s Alcan. The US$15.2 billion offering is the industry’s biggest and the fifth-largest in history.
The Anglo-Australian giant announced the move last month along with an iron-ore joint venture with fierce rival BHP Billiton, snubbing a massive cash injection by China’s Chinalco (中國鋁業).
“It’s positive that the rights issue has been completed — it certainly takes a lot of stress off the balance sheet,” said Michael Bush, head of credit research at National Australia Bank.
“It was a fairly heavily discounted rights issue so it was a bit of a no-brainer in terms of whether people should take it up. It’s positive for Rio that the money’s in the door and they can now pay down debt,” he said.
The new shares were issued at a price of A$28.29 (US$22.50), a massive discount to their closing price of A$51.75 in Sydney on Wednesday.
Chinalco on Thursday said it had taken up its allocation to remain Rio’s biggest shareholder, warning that it would keep a close eye on developments.
China has said it may oppose Rio’s joint venture with BHP, aimed at merging their vast Western Australia operations, on anti-monopoly grounds.
“[The rights offering] has put behind them the Chinalco tie-up and they’re able to get on with their business,” Tim Schroeders of Pergana Capital said.
“They don’t have to worry about the next refinancing window and they can start to plan for the longer term in terms of projects or financing acquisitions,” he said.
Analysts also said the successful rights issue would strengthen Rio’s hand as it looks to sell off assets. The miner dropped US$38 billion into the red with its purchase of aluminium company Alcan.
“It’s given them a bit of respite in terms of looking to sell assets at bargain basement prices,” Schroeders said.
Authorities have detained three former Taiwan Semiconductor Manufacturing Co (TMSC, 台積電) employees on suspicion of compromising classified technology used in making 2-nanometer chips, the Taiwan High Prosecutors’ Office said yesterday. Prosecutors are holding a former TSMC engineer surnamed Chen (陳) and two recently sacked TSMC engineers, including one person surnamed Wu (吳) in detention with restricted communication, following an investigation launched on July 25, a statement said. The announcement came a day after Nikkei Asia reported on the technology theft in an exclusive story, saying TSMC had fired two workers for contravening data rules on advanced chipmaking technology. Two-nanometer wafers are the most
DEFENSE: The first set of three NASAMS that were previously purchased is expected to be delivered by the end of this year and deployed near the capital, sources said Taiwan plans to procure 28 more sets of M-142 High Mobility Artillery Rocket Systems (HIMARS), as well as nine additional sets of National Advanced Surface-to-Air Missile Systems (NASAMS), military sources said yesterday. Taiwan had previously purchased 29 HIMARS launchers from the US and received the first 11 last year. Once the planned purchases are completed and delivered, Taiwan would have 57 sets of HIMARS. The army has also increased the number of MGM-140 Army Tactical Missile Systems (ATACMS) purchased from 64 to 84, the sources added. Each HIMARS launch pod can carry six Guided Multiple Launch Rocket Systems, capable of
CHINA’s BULLYING: The former British prime minister said that he believes ‘Taiwan can and will’ protect its freedom and democracy, as its people are lovers of liberty Former British prime minister Boris Johnson yesterday said Western nations should have the courage to stand with and deepen their economic partnerships with Taiwan in the face of China’s intensified pressure. He made the remarks at the ninth Ketagalan Forum: 2025 Indo-Pacific Security Dialogue hosted by the Ministry of Foreign Affairs and the Prospect Foundation in Taipei. Johnson, who is visiting Taiwan for the first time, said he had seen Taiwan’s coastline on a screen on his indoor bicycle, but wanted to learn more about the nation, including its artificial intelligence (AI) development, the key technology of the 21st century. Calling himself an
South Korea yesterday said that it was removing loudspeakers used to blare K-pop and news reports to North Korea, as the new administration in Seoul tries to ease tensions with its bellicose neighbor. The nations, still technically at war, had already halted propaganda broadcasts along the demilitarized zone, Seoul’s military said in June after the election of South Korean President Lee Jae-myung. It said in June that Pyongyang stopped transmitting bizarre, unsettling noises along the border that had become a major nuisance for South Korean residents, a day after South Korea’s loudspeakers fell silent. “Starting today, the military has begun removing the loudspeakers,”
RSS