Tata Steel sells $1bn Riversdale stake to Rio Tinto
This from Wall Street's Australian edition
Prasenjit Bhattacharya and Kenan Machado
From:Dow Jones Newswires
June 17, 20115:47AM
INDIA'S Tata Steel says it has decided to sell its entire 26.27 per cent stake in Riversdale Mining to Rio Tinto for about $1.06 billion, giving Rio Tinto complete control of the Africa-focused coal mining company.
Tata Steel said last night it was selling its stake as it didn't want to remain an investor in a soon-to-be delisted company if it didn't have a joint venture agreement with the majority owner.
Rio Tinto plans to delist Riversdale and, following the Tata Steel stake sale, it will hold more than 99 per cent in Riversdale, leaving the free float of shares at just 0.3 per cent of the total equity.
After Brazil's Companhia Siderurgica Nacional sold its 19.9 per cent stake in April, Tata Steel was the only remaining major stakeholder which hadn't complied with Rio Tinto's request.
Tata Steel said it would continue to hold its 35 per cent stake in a unit of Riversdale that owns the Benga mines in Mozambique, where the two companies have a long-term coking coal offtake agreement.
FEARS of a Greek default swelled today, sending the euro to a record low against the Swiss franc, as Greece moved closer to political chaos and European leaders moved no closer to a long-term debt solution.
Over the last six weeks, the euro has shed US8 cents against the US dollar, amid frustration with euro-zone leaders' inability to forge a consensus on a long-term debt plan for Greece.
The Australian dollar fell below $US1.05 cents in the overnight session but regained some of its composure as investors wait for developments on Greece's debt crisis.
At 7am AEST, the Australian dollar was trading at $US1.0555, up from $US1.0535 at Sydney close yesterday. It fell as low as $US1.0478 overnight.
Bickering between Germany and the European Central Bank about the need for a Greek debt restructuring has left many market observers dismayed.
Analysts say European Union leaders are accomplishing little beyond prolonging uncertainty --which is roiling markets worldwide -- and attempting to buy time that investors appear increasingly unwilling to give.