This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7885111.stm
The article has changed 5 times. There is an RSS feed of changes available.
| Version 3 | Version 4 |
|---|---|
| Chinese investment in Rio Tinto | Chinese investment in Rio Tinto |
| (about 2 hours later) | |
| Anglo-Australian miner Rio Tinto has announced that China's state-owned Chinalco is to invest a further $19.5bn (£13.6bn) in the business. | Anglo-Australian miner Rio Tinto has announced that China's state-owned Chinalco is to invest a further $19.5bn (£13.6bn) in the business. |
| The move - China's largest investment in a foreign company - could see Chinalco increase its stake in Rio to 18% from the current level of 9%. | The move - China's largest investment in a foreign company - could see Chinalco increase its stake in Rio to 18% from the current level of 9%. |
| The news came as Rio reported a 7% fall in 2008 profits to $9.2bn. | The news came as Rio reported a 7% fall in 2008 profits to $9.2bn. |
| Global commodity prices hit record highs last summer before falling back sharply as the world economy slumped. | Global commodity prices hit record highs last summer before falling back sharply as the world economy slumped. |
| Debt burden | Debt burden |
| Rio said the fresh investment from Chinalco "creates a pioneering strategic partnership". | Rio said the fresh investment from Chinalco "creates a pioneering strategic partnership". |
| Paul Skinner: 'the governance of the company is not disturbed by this' | |
| The deal will also allow Rio to reduce its debts, which are estimated at $39bn. | The deal will also allow Rio to reduce its debts, which are estimated at $39bn. |
| Chinalco's $19.5bn investment is made up of $12.3bn being spent on stakes in nine of Rio's mining assets, and $7.2bn on Rio bonds that can be converted into shares. | Chinalco's $19.5bn investment is made up of $12.3bn being spent on stakes in nine of Rio's mining assets, and $7.2bn on Rio bonds that can be converted into shares. |
| The announcement comes three days after Rio said non-executive director Jim Leng, who had been about to take over as chairman of the firm, had resigned. | The announcement comes three days after Rio said non-executive director Jim Leng, who had been about to take over as chairman of the firm, had resigned. |
| Mr Leng quit after disagreeing with the board about how Rio should tackle its debt burden. | Mr Leng quit after disagreeing with the board about how Rio should tackle its debt burden. |
| Bad timing? | Bad timing? |
| Some analysts questioned the timing of the deal, seeing as it comes at a time when commodity prices are low because of the weak global economy. | Some analysts questioned the timing of the deal, seeing as it comes at a time when commodity prices are low because of the weak global economy. |
| Doubtless we'll hear carping that Rio is selling at an inopportune down-phase Read Robert Peston's blog | Doubtless we'll hear carping that Rio is selling at an inopportune down-phase Read Robert Peston's blog |
| "Rio's board must be beside themselves having to do this," said Mark Pervan, senior commodities analyst at ANZ bank. | "Rio's board must be beside themselves having to do this," said Mark Pervan, senior commodities analyst at ANZ bank. |
| However, BBC business editor Robert Peston said this was only one way in looking at the announcement, and that in other respects Rio had got a good deal. | However, BBC business editor Robert Peston said this was only one way in looking at the announcement, and that in other respects Rio had got a good deal. |
| "Rio is securing a 60-year loan from the Chinese," he said. | "Rio is securing a 60-year loan from the Chinese," he said. |
| "It's selling a right to buy its shares in the future at a massive premium to the prevailing share price." | "It's selling a right to buy its shares in the future at a massive premium to the prevailing share price." |
| Last year Rio rejected an informal $66bn takeover approach from rival BHP Billiton, which is also an Anglo-Australian company. | Last year Rio rejected an informal $66bn takeover approach from rival BHP Billiton, which is also an Anglo-Australian company. |
| Rio also announced in December that it was cutting 14,000 jobs to reduce its debts by $10bn. | Rio also announced in December that it was cutting 14,000 jobs to reduce its debts by $10bn. |