Chinalco dreams of breaking the road to internationalization of Rio Tinto

June 5, Rio Tinto Group issued a formal announcement, announced its board of directors to revoke the strategic cooperation deal with Chinalco's recommendation, and Chinalco's deal will no longer continue, and will be through a fully-underwritten allotment method to raise the total amount of about 15.2 billion dollars. In a notice issued by Chinalco on the same day, the above situation was confirmed.　　So far, China's single largest project to date overseas investment has been declared bankrupt. The injection plan pulled Rio's share price to reverse the Chinalco's exit frustration was dragged and dragged. The "Chinalco 19.5 billion dollar investment Plan", released in early February, was concluded in the Australian government's approval process.　　But the four-month wait has not affected its positive effect on "debt-laden" Rio Tinto, which has been rally for several months, and on May 5 overtook Chinalco's first line of power to buy convertible bonds ($ 45 per share).　　"Chinalco has lost the most favorable time," industry experts say, the volatility of Rio's share price was the main cause of the Chinalco-Rio Tinto deal, and the impact of the Chinese stimulus package, the rebound in commodities and the wariness and scepticism inherent in Chinese state-owned enterprises accelerated the planned bankruptcy. The 19.5 billion-dollar plan is only a good boost for Rio's share price. Rio Tinto, a global resource-monopoly giant, saddled with $39 billion trillion in debt and a $9 billion trillion of debt due to expire in October, has left Rio with a noble head and a renewed search for ways to defuse the crisis.　　Earlier this year, Rio Tinto executives began to meet frequently with Chinalco's top brass, focusing on the topic of "capital injections". Chinalco and Rio Tinto Group issued a joint announcement on February 12, 2009 that the two sides have signed a strategic cooperation agreement, Chinalco will invest 19.5 billion of billions of dollars in Rio Tinto to acquire a stake of less than 18% per cent by establishing a joint venture and subscribing to convertible bonds, and submitting the agreement to the Australian government for approval.　　News, Rio Tinto's original depressed share price was the strong positive constantly upward. All backwards, the rise in share prices has also become a major cause of the failure of Chinalco and Rio Tinto. "Financial markets have improved markedly since we announced a deal with Chinalco in early February this year," Plessis, chairman of the board, said in an open letter to shareholders. The following two effects have been created: first, the value of the terms of the Chinalco deal has been significantly reduced, and second, it has made us eligible to offer more attractive terms for our interests.　　In an interview with our correspondent, Chinalco insiders said the first pricing of the convertible bonds included in the Chinalco plan is a forecast of Rio Tinto's share price for the next five years, which has been diluted and will naturally be strongly vetoed by Rio Tinto shareholders as Rio's share price rises. According to reports, in Chinalco's previously announced injection plan, 7.2 billion U.S. dollars to subscribe to Rio Tinto issued a, b two parts convertible bonds, respectively, 45 U.S. dollars per share and 60 U.S. dollars per share price, converted to Rio's common stock. You can also enjoy a 9% annual coupon. Judging from Rio's share price, May 5, the price was firstRio Tinto's Australian shares topped 70 Australian dollars (about $52.24), and Rio Tinto's UK shares rose to 30 pounds (about $45.41). In their contacts with Rio, the insiders say, while Chinalco is keen to make the plan, it does not mean that Chinalco will easily budge. "The short-term lifting of the stock price does not represent the long-term trend of the whole market, as a company, in the face of such a big investment plan, we can not take too much risk."　　said the person. Moreover, the stabilisation of China's economy and the rapid rebound in commodity prices have given Rio a refusal to hold on to Chinalco. At present, prices of the world's leading metal products have rebounded.　　The London Metal Exchange (LME) copper and aluminium prices have risen by more than 73% and 25% per cent respectively, compared with the lows of late last year. "China's threat to be constantly strengthened" foreign to the Chinese enterprises are always cautious attitude is also a major reason for the failure of the deal. "Li, director of China and the World Economic Research Center at Tsinghua University, said in an interview that he analyzed that the iron ore industry is Australia's core industry, for the local government, because Chinalco is a state-controlled large enterprise, facing a huge investment of $19.5 billion trillion, Some conservatives and lawmakers will oppose it from the standpoint of national security. Second, China is also the largest consumer of iron ore, and Chinalco's cooperation is bound to be rejected by its internal shareholders.　　The increase in Rio's holdings will affect its future dominance in the iron ore market, particularly with BHP Billiton, the Australian iron ore supplier. In fact, the Chinalco and Rio Tinto deals were immediately denounced by the Australian media and the public, once they were disclosed. The Australian government has been very harsh on the deal, and time has dragged on.　　According to a survey by Australian news pollsters in early April, respondents objected to allowing Chinalco to increase its stake in Rio Tinto to 18% per 59%. "Many of BHP's big shareholders are also Rio Tinto shareholders, and they are bound to vigorously oppose the plan," he said. "Rio Tinto's main problem is to resolve its debt, and most shareholders are now saying they will subscribe to Rio, plus the good performance of the current financial markets, and Rio Tinto is more willing to work with BHP Billiton, an iron ore upstream company," he said.　　"He said, because it would guarantee the company's monopoly."　　Whether Rio Tinto can "pull through" remains to be seen according to industry sources, Rio Tinto and BHP Billiton in the dark contact, Rio Tinto side and Chinalco negotiations to revise the plan, on the side of the breach to pave the way, and BHP negotiated the details of the joint venture. The Rio Tinto Group Bulletin said Rio Tinto will raise about $15.2 billion trillion through a rights issue ——— a share of 21 shares per 40 shares, Rio Tinto shares a price of 14 pounds per share, raising funds of about 11.8 billion U.S. dollars, Rio Tinto Limited's allotment price of $28.29 per share, raising capital of about 3.4 billion U.S. dollars. In addition, Rio Tinto and BHP Billiton will be forming joint ventures to jointly operate the Western Australian iron ore business, where BHP Billiton and Rio TintoWill hold a 50% per cent stake in the joint venture, and BHP will pay Rio $5.8 billion to get the stakes.　　But would abandoning cooperation with Chinalco really solve the debt crisis for Rio? "There is a great chance of success in general. "Because of the current international economic climate and the gradual upturn in emerging economies, especially China, commodity prices and equities are on the upside," he said in an interview.　　He also pointed out that, but not excluding the possibility of late fluctuations, the implementation of the plan may be worse than Rio Tinto expected. A person who declined to be named said that the impact of the positive factors such as the injection of Chinalco, the market impact alone, Rio Tinto's share price can remain high still unknown. "The current upturn in the iron ore market is due to increased imports from China, but it does not mean that demand in China will remain strong in the latter part of the period, and that China's steel and iron ore markets are at a high risk in the late period as inventories increase." said the person. It is understood that after the news of June 4, Rio Tinto UK share prices fell after the announcement, and its share price dipped to 26.28 pounds, down 9.7% from the previous session.