9% stake in Rio remains in limbo

THE 9% stake in Rio Tinto held by China's state-owned Chinalco and US aluminium group Alcoa remains in limbo as a result of the Lehman Brothers collapse. But Alcoa has told the US market the company expects the joint shareholding to be transferred "promptly and smoothly" from a custodial account with Lehman in London to another nominee account unaffiliated with the failed investment bank. Alcoa said that with Chinalco, it was working with Lehman administrators to achieve the transfer. The shares are held in a special-purpose vehicle that is the custodial account holder, "Shining Prospect". "No one disputes that Chinalco and Alcoa are the owners of the shares," Alcoa said. "These shares are held in custody. They are not assets of Lehman … or any other Lehman affiliate and are therefore not subject to the claims of Lehman's general creditors." Chinalco/Alcoa acquired the 9% Rio stake in a $US14 billion ($A20 billion) market raid in February. Rio's takeover suitor, BHP Billiton, is a keen observer of the possible lock-up of the parcel. The February raid on the Rio register forced BHP to replace its planned 90% minimum acceptance condition in its 3.4-for-1 Rio scrip bid with a 50% condition. In a recent briefing on Alcoa's disappointing September-quarter profit, Alcoa managing director Klaus Kleinfield said the group's long-term view on the Rio investment was "positive". It is sporting a 62% loss on its share of the February investment. 　　----by theage com.au