Rio Tinto's $15.2 billion rights offer, the fifth-biggest on record, generated strong demand from UK investors, putting the world's top iron ore miner back into growth mode after a debt-funded purchase of Alcan had brought it to its knees.
Rio revealed today that shareholders had stumped up for almost all its London shares on offer. The UK tranche would have raised about 7.1 billion pounds, more than a fifth of the market value of the UK-listed company.
Results from the Australian offer were still to be released.
Strong take-up of the rights offer would place Rio in a much stronger position, though the mining group will still need to sell off non-core assets, analysts said.
"The high take-up reflects that the offer was attractively priced," said Ross Barker, managing director of Australian Foundation Investment Co, which manages about A$3.5 billion including Rio shares.
"It also confirms our view that shareholders were wanting to participate in Rio's recapitalisation to get through with the issues that it had with the Alcan purchase."
Mr Barker's fund was among those shareholders who agitated earlier this year against a planned $19.5 billion tie-up with China's state-owned Chinalco ALUMI.UL.
Chinalco, Rio's top shareholder, took up its full entitlement in a sign it is far from severing ties with Rio.
Reuters