Rio Tinto sells 56-per cent stake in Alcan cable division
15 September 2009
Rio Tinto, the world's third-largest mining company is divesting its downstream Alcan Engineered Products; it ihas enetred into a deal with investment firm Platinum Equity to sell a 56-per cent of its cables division for an undisclosed sum.
In December 2008, the Anglo Australian miner had said that it would slash $5 billion in spending and increase asset sales as part of an aggressive cost cutting campaign to reduce its debt by $10 billion from the then $42 billion by the end of 2009. (See: Major shake up at Rio Tinto to reduce debt)
Alcan's cable division, based in Atlanta, manufactures high quality aluminium energy cable products and has been selling in the North American market for more than 100 years.
It operates through seven production sites in the USA, Canada and most recently China, serving the utility transmission and distribution markets as well the residential and non-residential construction markets.
A company spokesman said that Rio would consider selling the remaining stake as and when the market conditions improve.
Los Angeles, California-based Platinum Equity said the firm would keep the Alcan cable division as a standalone entity and Rio Tinto will continue to supply aluminium rod and molten aluminium to Alcan cable.
Rio Tinto had acquired Canadian aluminium group Alcan Inc for $38.1 billion at $101 for per share in July 2007 at the height of the commodities boom. (See: Alcan to merge with Rio Tinto under $38.1 billion deal)