22 May Rio Tinto launches debt reduction strategy
Rio Tinto has unveiled a plan to reduce its balance sheet through a US$2.5 billion buyback of its own bonds.
Under the debt reduction strategy, the Anglo-Australian miner has issued a redemption notice for around $1.72 billion of its notes which are due to fall over the course of 2019 and 2020.
Rio will spend the remaining $780 million buying back bonds that fall in 2021, 2022 and 2025.
The announcement is part of the commodities giant’s ongoing capital management plan, with the latest strategy preceded by a similar $7.5 billion redemption plan, which was completed last year.
The world’s third largest miner by revenue, Rio has become a global leader in terms of successful restructuring programmes following the commodities price crash.
In its recent annual financial report, net debt stood at $9.6 billion for the year ending December 31 2016, down from over $13.78 billion at the end of 2015.
Rio’s stock price rose more than 1.5% following the announcement, boosting the overall mining sector on the London Stock Exchange.