Rio Tinto plays chancy round of Mongolian roulette. mining miningnews
is shaping up to be a big day for Jakob Stausholm. Just ahead of his two-year anniversary as Rio Tinto’s chief executive, he will learn the fate of the mining giant’s tortuous efforts to buy out minority investors in Turquoise Hill Resources, the majority owner of a flagship project in Mongolia. Success would give the growth strategy a real boost; failure could mean senior heads roll.
The process has been a shambles. Before Stausholm’s first offer in March, Turquoise Hill shares had been trading around C$25 apiece, valuing the equity at $3.7 billion. Some owners, including Pentwater Capital Management, which now holds a 15% stake, spurned the initial 36% premium. They also dismissed a sweetened C$40 bid. Even when Rio divulged its final offer of C$43 a share in September, valuing the company at $6.7 billion, Pentwater and another refusenik, SailingStone Capital, demurred.
Imagine minority shareholders vote down the offer, but Rio then has Turquoise Hill issue fresh equity. Extending the due date on a chunk of its debt while raising, say, half the funding gap in shares at a 40% discount to Turquoise Hill’s current C$42 price would dilute Pentwater from 15% to 10%, on Breakingviews calculations. The viability of renegotiating the borrowing terms is controversial, however. If Rio had to raise the full $3.
Those factors may save the Rio CEO if he loses the takeover vote, but a failed buyout could still put pressure on Bold Baatar, the head of copper. He played a key role in negotiating the recent deal with the Mongolian government. At the same time, in a potential sign of where the blame might fall, only Baatar was included in the company’s Nov. 18 press release ending the ill-fated side deal with investors, whereas Stausholm appeared alongside Baatar in the September offer announcement.
Singapore Latest News, Singapore Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Breakingviews - Rio Tinto plays chancy round of Mongolian rouletteDecember 9 is shaping up to be a big day for Jakob Stausholm. Just ahead of his two-year anniversary as Rio Tinto’s chief executive, he will learn the fate of the mining giant’s tortuous efforts to buy out minority investors in Turquoise Hill Resources , the majority owner of a flagship project in Mongolia. Success would give the growth strategy a real boost; failure could mean senior heads roll.
Read more »
Prince Harry Accuses Palace of Leaking Stories in New 'Harry & Meghan' Trailer: 'It's a Dirty Game'Volume I of the show drops on December 8 and Volume II is coming December 15.
Read more »
Environmental and human rights assessment of Rio Tinto’s former Panguna copper mine beginsThe Panguna mine was operated by BCL, majority-owned by RioTinto, for 17 years from 1972 until 1989, when operations were suspended due to an uprising. miningnews
Read more »
Browns vs. Ravens game in Week 15 scheduled for Saturday, December 17 at 4:30 p.m.Deshaun Watson's home debut at FirstEnergy Stadium will take place on Saturday, Dec. 17 at 4:30 p.m.
Read more »
Daily horoscope for December 5, 2022Get your daily horoscope for December 5, 2022 from astrologer Georgia Nicols.
Read more »