MercoPress. South Atlantic News Agency

Rio Tinto shareholders help to reduce stress of the balance sheet

The purchase of Alcan shook the company and caused a situation with Beijing

A call for cash by Rio Tinto has seen a strong take-up from its existing Australian shareholders - a day after similar success in the UK. The mining giant saw 95% of the heavily discounted shares available in Sydney taken up. It had earlier reported a 96.97% take-up of London shares.

The firm was trying to raise 15.2 billion US dollars in its dual listings. Rio Tinto is seeking to reduce the 38 billion of debt it took on to buy the Canadian aluminium group Alcan in 2007.

In February, the Anglo-Australian firm announced that it would be receiving a 19.5 billion US dollars investment from China's Chinalco, which would have increased its stake in Rio to 18% from 9%.

However, in June, Rio Tinto said it was scrapping the deal with Chinalco in favour of a tie-up with rival giant BHP Billiton, and also announced its plans to raise funds from investors.

Chinalco remains Rio's biggest shareholder, and on Thursday, Rio confirmed that the Chinese firm had taken up its full entitlement of new shares in the rights issue.

“It's positive that the rights issue has been completed - it certainly takes a lot of stress off the balance sheet,” said Michael Bush, head of credit research at National Australia Bank.

”It was a fairly heavily-discounted rights issue so it was a bit of a no-brainer in terms of whether people should take it up. It's positive for Rio that the money's in the door and they can now pay down debt”.-