Rio Tinto Shares Drop On Reports Chinalco Deal Off

JANE WARDELL

LONDON (AP) — Rio Tinto PLC said Thursday it is "pursuing a range of options" to shore up its debt-laden balance sheet amid growing speculation that the Anglo-Australian mining company is going to walk away from a $19.5 billion deal with China's Chinalco.

Shares in Rio Tinto dropped 7 percent in London trade on the reports that Rio Tinto could instead launch a multibillion dollar rights issue to solve its debt problems and potentially restart talks with rival and former suitor BHP Billiton.

Other reports suggested that Chinalco could be the driving force behind calling off the deal.

In a statement to the London Stock Exchange, Rio Tinto did not directly deny the speculation, but declined to comment in detail.

"Rio Tinto is pursuing a range of options, some of which are at an advanced stage, for maximising shareholder value and improving the group's capital structure," it said in the statement, as executives met in London.

Rio Tinto turned to Chinalco in February to help repair a balance sheet weighed down by $38.7 billion in debt. A payment of $8.9 billion is due in October.