Rio completes US$40 billion loan facility

Rio Tinto Limited (RIO) said it had successfully completed the sub-underwriting phase of the syndication of its US$40 billion ($48.8 billion) term loan and revolving credit facilities. The mining giant said this was the largest ever loan facility raised by a UK corporate and the fourth largest worldwide. The Facilities will be used to finance the acquisition of all the outstanding common shares of Alcan Inc for a total consideration of US$101 per common share representing a total equity consideration of approximately US$38.1 billion and an enterprise value of approximately US$44 billion, the company said. Rio said the syndication received very strong support despite recent volatility in the global credit markets and was more than one third oversubscribed. The Facilities were initially underwritten by The Royal Bank of Scotland, Deutsche Bank, Credit Suisse and Société Générale, the company said. Chief financial officer Guy Elliott said the positive response underlined the strength of Rio Tinto's existing asset base, the attractiveness of the Alcan transaction and the solid credit profile of the enlarged Rio Tinto Group. This bodes well for our future refinancing plans in the debt capital markets, he said. The acquisition of Alcan will create a new global leader in the aluminium industry with large, long life, low cost assets. The acquisition will be value enhancing to Rio Tinto shareholders, and is expected to be earnings and cash flow per share accretive in the first full year, Rio said in an announcement. Rio's recent $44.31 billion acquisition of Alcan makes it the largest aluminium producer in the world. By 1221 AEST, shares in Rio had added on 79c to $90.91 .