Global mining major Rio Tinto today said it would delist Riversdale, in which Tata Steel holds more than 26 per cent stake, from the Australian Stock Exchange (ASX), after the completion of its takeover offer on Friday if it was not extended.
This was in reply to a query on whether it would go ahead with delisting of Riversdale from ASX even if Tata Steel opposed the move.
The diversified mining major, headquartered in London and Melbourne, had earlier in a letter to Riversdale shareholders, sent to ASX, had said it intended to delist Riversdale after the close of the offer.
Rio Tinto, which holds about 73 per cent stake in the Australian mining firm, extended the takeover offer till May 6 from April 29. The free-float of Riversdale shares, not held either by Rio Tinto or Tata Steel, currently stands at 0.65 per cent.
Last month, Tata Steel, in the wake of the developments, had said it would continue to hold its stake in the Australian entity in view of the soaring prices of coking coal, a vital steel making raw material. “Our stand is the same from day one. We will continue to hold stake in Riversdale...In 1995, the price of coking coal was $50 a tonne and now it is over $300. In such a scenario, should I not stay invested?” Tata Steel Vice-Chairman B Muthuraman had said.
Tata Steel, which has 28 million tonnes per annum steel-making capacity, needs coking coal to feed its operations across regions. The company has been continuously opposing Rio’s buying stake in Riversdale, along with Brazilian steel maker CSN. However, CSN backed out from its earlier stand last month and sold its entire 19.9 per cent stake to Rio, which got about 73 per cent stake with this. Riversdale has been a takeover target for Rio Tinto since December 2010, when it put in a bid of Australian $ 16 per share to acquire a majority stake in the Australian mining firm.
After getting the targeted 47 per cent stake, Rio Tinto had sweetened its offer to Riversdale shareholders to A$ 16.50 per share to get controlling stake.
Riversdale has an estimated 13 billion tonnes reserves in its two projects in Mozambique — Benga and Zambeze. Tata Steel also holds 35 per cent stake in Benga Coal project.
