Rio May Delay Sale, Vedanta Can't Close Deal as markets freeze By Rebecca Keenan and Jesse Riseborough
Oct. 15 (Bloomberg) -- Rio Tinto Group may delay the planned sale this year of $10 billion of assets and Sterlite Industries (India) Ltd. shelved its $2.6 billion purchase of Asarco LLC because of the global financial crisis. Rio, battling an $86 billion takeover bid from BHP Billiton Ltd., said today it's also reviewing its spending timetable and project costs. Sterlite, a unit of London-based Vedanta Resources Plc, told bankrupt U.S. copper producer Asarco to cut its price by ``hundreds of millions of dollars.'' ``Acquirers will find it harder to source funds and even if they can source funds, they'll have to pay more,'' said Steve Robinson, a senior investment manager with Alleron Investment Management in Sydney, which manages A$1.2 billion ($839 million). ``Given what's happened with commodity markets, they may not find buyers prepared to pay a premium.'' The worst financial crisis since the Great Depression is freezing credit and thwarting acquisitions and expansions. Xstrata Plc this month abandoned its 5 billion-pound ($8.7 billion) hostile bid for platinum producer Lonmin Plc. Freeport- McMoRan Copper & Gold Inc., the world's largest publicly traded copper producer, said yesterday it may defer projects to save cash. Rio fell 270 pence, or 9.6 percent, to 2,556 pence as of 9:58 a.m. in London trading. Vedanta declined 12 percent to 794.5 pence. The Bloomberg Europe Metals & Mining Index dropped 9.7 percent. Bankruptcy Protection Asarco, based in Tucson, Arizona, was trying to sell itself to Sterlite as part of a plan exit bankruptcy court protection. The companies will attend a court-ordered mediation session on Oct. 30 with Asarco's parent, Grupo Mexico SAB, which has proposed a competing, $2.7 billion reorganization plan, Asarco's lead bankruptcy lawyer Jack Kinzie said yesterday. A Nov. 17 hearing to decide between Grupo Mexico's reorganization proposal and the Sterlite plan remains on the court's calendar, Kinzie said. Sumanth Cidambi, associate director of investor relations for Sterlite, didn't immediately return a call seeking comment. The value of takeovers announced this year fell 30 percent to $2.3 trillion as of Sept. 30 as the global credit crisis stalled plans, according to data compiled by Bloomberg. Waste Management Inc., the largest U.S. trash hauler, withdrew its $6.73 billion offer for Republic Services Inc. this week, saying that the bid ``would not be prudent.'' London-based Rio, the world's second-largest iron ore producer, plans to sell assets to help pay for its $38.1 billion purchase last year of aluminum producer, Alcan Inc. Debt Increase The company said last November it may sell as much as $30 billion of assets after increasing its long-term debt 19-fold through the Alcan acquisition. It wants to sell Alcan's packaging and engineering products unit, its talc unit and other mining projects. Rio has already made divestments, selling its 40 percent stake in the Cortez gold mine in Nevada for $1.7 billion in February to Barrick Gold Corp., its 70 percent stake in Greens Creek base metal mine in Alaska for $750 million to Hecla Mining Co. in February and its 70 percent stake in the Kintyre uranium project for A$346.5 million to Cameco Corp. and Mitsubishi Development Pty. Rio today posted a 17 percent increase in iron ore production for the three months ended Sept. 30. Production of the raw steelmaking material advanced to 42.4 million metric tons from a year ago as the company expands mines in the Pilbara region of Western Australia to meet demand from China. Refined copper fell 30 percent to 68,900 tons, from 98,700 tons a year earlier because of declining grades at the Escondida mine in Chile, the world's biggest copper mine, the company said. Mined copper output slipped 7 percent to 160,000 tons. Coking coal output rose 40 percent to 2.2 million tons as port constraints in Australia eased, Rio said. To contact the reporters on this story: Jesse Riseborough in Melbourne at [EMAIL PROTECTED]; Rebecca Keenan in Melbourne at [EMAIL PROTECTED] Last Updated: October 15, 2008 05:01 EDT --~--~---------~--~----~------------~-------~--~----~ Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum * Visit our other community at http://www.PoliticalForum.com/ * It's active and moderated. Register and vote in our polls. * Read the latest breaking news, and more. -~----------~----~----~----~------~----~------~--~---
