FTSE 100 mining giant Rio Tinto has pumped in just under a billion dollars into its subsidiary Ivanhoe, by taking up its full entitlement in the Asia and Australia-focused miner's rights issue.
Rio paid just under $935m to acquire just over 133.57m Ivanhoe shares, which were being offered to shareholders at $7.00 each.
The purchase means Rio retains its 51% stake in Ivanhoe, now equal to around 510.97m shares.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Around 99.2% of the shares on offer were taken up by Ivanhoe shareholders, raising $1.8bn (gross) for the company as a result.
The purpose of Rio acquiring additional shares was to honour its contractual obligations to Ivanhoe and to provide additional funding to Ivanhoe to ensure the timely development of Ivanhoe's Oyu Tolgoi copper-gold mine in Mongolia, it said.
The company added that it currently has no intention of acquiring additional shares in Ivanhoe, but said that depending on its evaluation of the business, prospects and financial condition of Ivanhoe, the market for Ivanhoe's securities, general economic and tax conditions and other factors, it may acquire or sell some or all of the securities in the firm.
The share price rose 2.09% to 2,952.50p by 15:19 (against a sector rise of 1.89%).
NR
-
Six out of 10 retirees who accessed a pension didn’t use Pension Wise - how does the guidance service work?Many pension savers don’t bother using the free government-backed service Pension Wise. So, how does it work, and could it be useful for you?
-
UK-EU trade deal: Britain to get a £9bn boost to the economy by 2040The government’s agreement with the EU follows on from separate deals with India and the United States. Will it breathe life into the UK economy?
