Rio Tinto sells stake in Alcan division to private equity

RIO Tinto says it sold a majority stake in its Alcan Engineered Products cable division to a private equity group, the first step toward breaking up and divesting the entire Engineered Products business. The Anglo-Australian miner sold a 56 per cent stake in the cable division to US private equity group Platinum Equity for an undisclosed sum. A Rio Tinto spokesman said the sale would "not be material" to the company's finances. "This is the first time we have entered an agreement with a private equity partner and we look forward to working with them," Rio Tinto chief financial officer Guy Elliott said. The sale will allow Rio to step back from day-to-day management of the business while retaining an "economic interest in its recovery as market conditions improve," Mr Elliott added. Rio will consider selling the remainder of its holding when market conditions improve, the spokesman said. Brian Wall, partner at Platinum, said the private equity group would transition the Atlanta-based cable division to a standalone entity. Rio Tinto will remain a supplier of aluminium rod and molten aluminium to the business, Mr Wall said. Last month, Rio Tinto said it decided it would have to break up Alcan's Engineered Products after failing to find a buyer for the whole business. The loss-making Engineered Products division makes aluminium components for aircraft and vehicles, as well as cables, construction materials and other specialty products. Rio also has already broken up and sold most of its Alcan Packaging business, with Amcor last month agreeing to buy parts of the business for $US2.03 billion ($2.4bn), and American Bemis in July agreeing to buy the Alcan Packaging food Americas division for $US1.2bn. Rio is still looking to sell the packaging business' beauty division. Rio acquired the packaging and engineered products assets in its $US38.1bn takeover of Alcan in 2007, which saddled the miner with $US40bn in debt. {dj:company}News |Charts |ProfileLast: {dj:last}{dj:change}{dj:changepercent}{dj:quotedate} Add to Portfolio Add to AlertsSponsored By: