Mining Company Sells Off Shares to Reduce Debt

With hopes to reduce its mounting debt, Rio Tinto Group, opted to sell 97 percent of its London-listed shares. By 11am London time on Monday, the company had sold 508.6 million shares for $15.2 billion.

Rio opted for the sale instead of cashing in on a $19.5 billion investment proposal from its biggest shareholder Aluminum Corp. of China. Rio also accepted a joint iron ore venture with BHP Billiton Ltd.

"This was an economically rational decision, as it prevented the dilution of our ownership in Rio," the Chinese company said in an e-mailed statement. "Chinalco will, as the company's current largest single shareholder, continue to monitor developments at Rio."

15.9 million U.K. shares not purchased in the sale will be price at 2,100 pence. Credit Suisse and JP Morgan, underwriters of the deal, will now seek buyers for those shares.

Rio's financial troubles came to a head in 2007 when the company bought aluminum producer, Alcan Inc for $38.1 billion. BHP had considered an all stock takeover of Rio last November. But that plan was forgotten, and Rio's increasing debt was cited as one of the reasons.