London, England — MININGREVIEW.COM — 07 July 2009 – Rio Tinto – one of the world’s leading mining and exploration companies – has sold a division of its Alcan unit for US$1.2billion (R9.6 billion) as it continues its quest to reduce its international debt situation.
In releasing news of this development here, the company said the deal to sell its Alcan Packaging Food Americas division to US-based Bemis Company Incorporated was subject to regulatory approvals, and that US$200 million (R1.6 billion) of the total price might be in the form of Bemis shares.
This move is the latest by Rio to reduce its debt, which is about US$23.9billion (R191 billion), after raising fresh capital last week through a share issue. Rio incurred significant debt in its 2007 purchase of Canadian aluminum giant Alcan Incorporated for US$38billion (R304 billion).
“The sale of the Food Americas division is the first significant step in reducing the asset portfolio acquired with Alcan,” said Rio Tinto chief financial officer Guy Elliott. “The transaction represents solid value given the challenging financial environment.”
So far in 2009, Rio Tinto has announced a total of US$3.7 billion (R29.6 billion) of asset sales, including its interest in an aluminum smelter in China, Brazilian iron ore operations and a coal mine in the United States. It has also identified Alcan’s packaging and engineered products divisions as candidates for sale.