Rio Tinto: Credit crunch not impacting Alcan deal financing

The credit crunch stemming from fears over the problems in the U.S. subprime mortgages market hasn't affected Rio Tinto PLC's (RIO.LN) ability to secure financing for its deal to buy Canadian aluminum producer Alcan Inc., the company's chief financial officer said Thursday. Noting that the "flight to quality" as a result of the reprisal of risk has benefited investment in companies like Alcan, Rio Tinto's Guy Elliott said his company had been in ongoing talks with a number of lending banks. "The status is that we have full bridging finance in place for the Alcan transaction. We're now in the process of turning that out," he told a conference call for the company's interim results. And despite the backdrop of global financial uncertainty, there remains a "very strong appetite amongst the banks to lend to a company like us." Rio Tinto in July announced its $38.1 billion bid for Alcan - the largest takeover deal ever in the consolidating global mining sector - with the aluminum company's board unanimously recommending acceptance. The deal will push Rio Tinto's gearing to around 60%, but the company has said it is confident this will come down rapidly, particularly given its strong cash generation of $1 billion a month. It also plans to raise cash from the disposal of Alcan's packaging business, and is reviewing the whole combined portfolio of the new company in order to undertake asset sales. Earlier Rio Tinto said first-half net profit fell 14% to $3.25 billion, from $3.80 billion in the year-earlier period.