Glencore has submitted a proposal to acquire Rio Tinto’s 100% interest in Coal & Allied Industries Limited for US$2.55bn cash plus a coal price linked royalty. The Glencore Proposal will be funded from existing cash resources and committed facilities and is subject only to regulatory conditions.
A unit of Mitsubishi Corporation has a right to sell its 32.4% stake in the Hunter Valley Operations joint venture (HVO JV).
There is no certainty that any transaction will be concluded. Glencore will only be bound once a binding share purchase agreement is concluded with Rio Tinto.
If a transaction is concluded, Glencore intends to mitigate its overall financial commitment via a sale / monetisation of assets (prioritising its coal portfolio) of no less than US$1.5 billion, including exploring the option of selling down up to 50% of its interest in the C&A mines.
