Comprehensive M&A data with integrated detailed company information

Pacific Aluminium could hold IPO instead of sale: report
Posted on Monday, 12 February 2018 11:44
A sale of Pacific Aluminium by Rio Tinto may turn into a full or partial initial public offering (IPO) on the Australian Securities Exchange instead, according to the Australian Financial Review’s Street Talk column.

Discussions regarding the assets taken on through the disastrous USD 38.00 billion acquisition of Alcan in 2007, billed as one of the worst decisions in corporate history, are still at an early stage and may come to nothing.

Street Talk even noted that it is not yet known if Rio Tinto has hired investment banks to look into all the different divestment options currently on the table.

Valuations for Pacific Aluminium differ widely, with Credit Suisse estimating USD 1.90 billion while analysts at Macquarie think it could fetch twice this amount, USD 3.90 billion.

The Brisbane-headquartered subsidiary’s operations include Bell Bay Aluminium in Tasmania, Boyne Smelters and Gladstone Power Station in Queensland, Tomago Aluminium in New South Wales, and New Zealand Aluminium Smelters.

When contacted by the newspaper, Rio Tinto declined to comment on the reported IPO, which would be merely the latest update in a three-year-long process to sell on the assets.

Incidentally, Pacific Aluminium is still on the divestment list of all but the mining giant’s best-performing activities.

Street Talk noted that when asked last week about the fit of the wholly-owned subsidiary, chief Jean-Sebastien Jacques said: “All our assets are for sale at any point in time. It's only a question of value.

"If somebody comes and offers the right value for Pacific Aluminium, we will look at it. That's where we are today."

Rio Tinto recorded net underlying earnings of USD 1.58 billion for its entire aluminium division in the financial year ended 31st December 2017, though the wholly-owned subsidiary only contributed USD 176.00 million.

© Zephus Ltd