Private equity group Platinum Equity to take 56 per cent stake in Rio Tinto division Alcan Cable

Private equity group Platinum Equity has agreed to acquire a controlling interest in Alcan Cable, the aluminium cable division of multinational mining and resources group Rio Tinto.The financial details of the deal were not disclosed. Platinum Equity expect the deal to be completed in the next few weeks pending the completion of certain closing conditions. Rio Tinto purchased the Alcan group for $38.1bn in mid 2007, at the height of the commodities boom, a move that has negatively affected its balance sheet over the last two years. The Platinum Equity sale follows Rio Tinto’s $2bn sale of the remainder of its Alcan packaging businesses to Austalian packing group Amcor last month. Guy Elliott, CFO, Rio Tinto, said, “This is the first time we have entered an agreement with a private equity partner and we look forward to working with them. This offers a good solution to Rio Tinto as we will be able to step back from day to day management of the business but retain an economic interest in its recovery as market conditions improve.” Rio Tinto will retain a 44 per cent interest in Alcan Cable, and will remain a supplier of aluminium rod and molten aluminium to the business, according to a statement.