Rio’s New Chairman Plans to Meet ‘Unhappy’ Investors

April 20 (Bloomberg) -- Jan du Plessis, the new chairman of debt-laden Rio Tinto Group, will meet “unhappy” investors ahead of a vote about Aluminum Corp. of China’s proposed $19.5 billion investment in the world’s third-largest mining company. “I will go out of my way to find out what people really think and what people really feel,” du Plessis said today after he was elected as chairman to succeed Paul Skinner at the company’s general meeting in Sydney. The 55-year-old executive, who will meet 25 shareholders in London next month, said he is committed to the deal. Rio is under attack from shareholders and Australian politicians because the Chinese investment would hand partial ownership of some mines and plants to state-owned Chinalco, as the company is known. Rio’s No. 3 shareholder is calling for an alternative proposal to help it reduce $38.9 billion of debt. “We are as committed to pursuing the Chinalco transaction as we might have been two months ago,” du Plessis said. “It is quite important to keep in mind although financial markets have improved slightly, of course the real economy is pretty much where it was two months ago and arguably possibly in an even worse state.” Rio dropped 2 percent to close at A$57.90 on the Australian stock exchange. That compared with a 1.6 percent fall in rival BHP Billiton Ltd. shares. The stock has gained 11 percent since the Chinalco proposal was announced on Feb. 12, whereas BHP is little changed. British American Tobacco Rio turned to du Plessis after its prior nominee, Jim Leng, resigned less than a month following his appointment because of a disagreement about how to cut debt. Du Plessis said today he would resign from his role as chairman at British American Tobacco Plc within a year to focus on Rio. Du Plessis said he understands how some shareholders are not happy with the recent performance of their company. A date has not yet been set for the vote by shareholders on the proposal by Beijing-based Chinalco. Chinalco plans to buy $7.2 billion of convertible debt and $12.3 billion worth of stakes in projects owned by Rio. It will own 18 percent of Rio, which has about one-third of its assets in Australia, should it convert the debt. Rio Chief Executive Tom Albanese today said the deal would position Australia to benefit from a relationship “that could define the next few decades,” and boost exports. Rio incurred debt from the 2007 purchase of aluminum producer Alcan Inc., and must repay $8.9 billion of related debt this year and $10 billion in 2010. Legal & General Group Plc, Rio’s third-largest investor with 4.6 percent of the stock, in February called for an alternative proposal that could be considered by all shareholders. The Association of British Insurers, representing 400 institutional investors, said it was “deeply concerned” by the deal because it ignored shareholders apart from Chinalco. Chinalco is Rio’s largest shareholder. To contact the reporters on this story: Rebecca Keenan in Melbourne at rkeenan5@bloomberg.net; Jesse Riseborough in Melbourne at jriseborough@bloomberg.net.