Rio Tinto stake rises to 72% in Riversdale; CSN agrees to quit

Rio Tinto stake rises to 72% in Riversdale; CSN agrees to quit

Melbourne/New Delhi: Mining giant Rio Tinto on Wednesday said its holding in Riversdale has risen to 72% following Brazil’s CSN accepting its offer to sell the entire 19.3% stake in the Sydeny-based miner.

“Rio Tinto has now obtained an interest in more than 72% of all the shares in Riversdale," Rio Tinto said in a statement.

India’s Tata Steel with a 27.14% stake is the second largest shareholder in Riversdale.

Rio Tinto has also extended the takeover offer to 29 April and hinted the deadline could be extended further.

On 8 April, London-based Rio Tinto had announced the acquisition of a majority stake in Riversdale and stated that its holding might go up further since the takeover offer would remain open till 20 April.

Both Tata Steel and CSN were trying to boost their positions in Riversdale by increasing stakes since Riversdale became a takeover target by Rio in December 2010.

Tata Steel’s comment on whether it would like to follow CSN suit or stay put as stated earlier could not be availed, sources said since Tatas’ interest in Riversdale was mainly in getting coal than just making a quick buck, it is unlikely to buckle under any kind of offer from Rio Tinto.

Tata Steel group, which has over 28 million tonnes per annum steel making capacity now, needs to have coking coal, an important steel making raw material, to feed its operations across the globe.

Within India also, Tata Steel is enhancing steel making capacity to 10 million tonnes per annum at its Jamshedpur facility from 6.8 mtpa now.

Rio had put in the takeover bid at $16.8 per share for Riversdale in December 2010. The offer was cleared by the Riversdale Board in January 2011, encouraging company shareholders to accept the bid in the absence of any other better offer.

Following the acquisition of the targeted 47% stake in the company at $16.8 a share, Rio Tinto sweetened its offer to Riversdale shareholders to $16.8 per share to get hold of more holding in the company.

Riversdale has an estimated 13 billion tonnes thermal coal reserves in two projects in Mozambique.