Defending the bid of Chinese state-owned aluminum giant Chinalco to almost double its stake in Australian miner Rio Tinto from the existing 9.3 percent to 18 percent, Rio Tinto's chairman Paul Skinner said on Monday, April 20, that Chinalco had offered the miner asset prices at the "top level at bottom market conditions."
Speaking at the company's annual meeting in Sydney, Mr. Skinner told shareholders, "Some of our asset sales were successful, some offers were such low-ball propositions that they didn't make sense."
"Chinalco offers a comprehensive financial solution, and it offered asset prices that were secured at the top level at bottom market conditions," Mr. Skinner added.
Rio Tinto has been struggling with the debt burden it took on to fund its US$38.1 billion purchase of Alcan in 2007, with falling commodity prices disrupting cash flow and planned asset sales stalling.
With US$8.9 billion due to be paid in October this year and a further US$10 billion due in October 2010, the miner is banking on its planned US$19.5 billion deal with Chinalco to ease its debt burden.