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Expert Corporate Governance Service (ECGS)
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Etude de l'AG du 27/06/2017

Item 1: To approve the sale of its 100% of the interest in the share capital of Coal & Allied Industries to Yancoal
Shareholders are asked to approve the disposal of Coal & Allied Industries, a subsidiary of the Company. The proposed buyer, Yancoal, is deemed to be a related party to the Company under UK Listing Rules and as such the listing rules require approval of the shareholders of the listed company for such a transaction.
The Board states that the divestment is consistent with the Company’s strategy to re-allocate capital in order to ensure high returns to shareholders. Under the terms of the transaction agreed between the Company and Yancoal, the total purchase price payable for Coal & Allied Industries comprises an initial payment of USD 1.95bn, payable at completion of the transaction and USD 500m in aggregate deferred cash payments, payable as annual instalments of USD 100m over the five years following completion of the transaction. Additionally, Yancoal must also pay a coal price linked royalty. Rio Tinto will use the consideration received from the Transaction for general corporate purposes. In the near term, completion of the Transaction will reduce the net indebtedness of Rio Tinto.
The Company has presented sufficient justification of the divestment.  The Board has investigated alternative offers and completed “a comprehensive market testing and price discovery process.”  The divestment is aligned with the Company’s strategy.
 

Underlying
Rio Tinto PLC

Rio Tinto is engaged in finding, mining and processing mineral resources. Co. has four product groups: iron ore, which supplies the global seaborne iron ore trade; aluminium, which includes bauxite mines, alumina refineries, and aluminium smelters; Copper and Diamonds, which has managed operations in Australia, Canada, Mongolia and the U.S., and non-managed operations in Chile and Indonesia, with by-product including gold, silver, molybdenum and others such as sulphuric acid, rhenium, and lead carbonate; and Energy and Minerals, which comprises mining, refining and marketing operations across borates, coal, iron ore concentrate and pellets, salt, titanium dioxide and uranium sectors.

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Proxinvest
Proxinvest

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Expert Corporate Governance Service (ECGS)

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