Rio Tinto 'pleased' by $19b new capital

Anglo-Australian miner Rio Tinto Ltd has successfully completed a $US15.2 billion ($A19.22 billion) equity raising that will allow it to pay down debt, after a strong take up of the new stock by investors.

The Australian leg of the raising was completed on Friday, with shareholders placing orders for 94.76 per cent of the shares available under a 21-for-40 renounceable rights offer.

The stock was offered at $28.29 each and at a deep discount to Rio Tinto's market trading price, which ended at $49.60 on Friday, down $2.15.

All of the 7.87 million shares that were not subscribed for under the offer were on Friday sold by underwriters Credit Suisse, JP Morgan and Macquarie Group for $48.50 each after a bookbuild, giving them extra profit on top of fees.

Australian investors eventually stumped up a total of $A4.402 billion under the local rights offer and the ensuing placement of the leftover "rump" stock.

The close of the transaction comes after the UK rights offer, at 1,400 pence per London-listed share, attracted acceptances totalling 96.97 per cent.

The leftover stock being placed by underwriters at 2,100 pence each, also reflecting a tidy extra profit for the banks.

Rio Tinto said was very pleased at the outcome of the $US15.2 billion ($A19.22 billion) raising, which was announced in early June, after it dumped a proposed $US19.5 billion investment deal with Aluminum Corporation of China (Chinalco)

Chinalco eventually took up its full entitlement under the UK offer to maintain its 9.3 per cent holding in the Rio Tinto group.

"We are in better control of our destiny," a Rio Tinto spokesman said.

Rio Tinto will use the proceeds - after $US430 million ($A543.75 million) in fees to the underwriters are paid out - to pay down some of the $US38.7 billion ($A48.94 billion) of debt racked up after its takeover of Canadian aluminium giant Alcan in 2007 near the height of the commodity boom.

It will cut debt to about $US23.93 billion ($A30.26 billion), exceeding its own commitment to reduce debt by $US10 billion ($A12.65 billion) in 2010.

Its financials position will be further boosted after BHP Billiton Ltd pays it $US5.8 billion ($A7.33 billion) to equalise its 50 per cent stake in an iron ore joint venture the two companies are setting up in Western Australia.

Those funds are expected to be paid sometime next year.

Meanwhile, the net proceeds of $20.10 per new share on the left over Australian stock - the difference between the issue price and the bookbuild price - will be paid to those shareholders who did not exercise their entitlement under the rights offer.

Austock Securities senior client adviser Michael Heffernan said the high take-up rate of the equity offered by Rio Tinto was an excellent result.

"Clearly it was priced at an attractive level for investors, marked down at about 40 per cent from its then prevailing price," he said.