LONDON (dpa-AFX) - Rio Tinto Plc (RTNTF.PK, RIO, RIO.L, RTPPF.PK) said it and Ivanhoe Mines Ltd. (IVN, IVN.TO) have agreed to amend certain terms of the memorandum of agreement announced on April 18, 2012, under which Rio Tinto has agreed to support and provide certain elements of a comprehensive funding package for Ivanhoe.
As per the amendments to the agreement, Rio Tinto confirmed it will take up its full basic subscription privilege under the $1.8 billion rights offering with respect to its 51 per cent shareholding in Ivanhoe, subject to certain conditions. Rio Tinto agreed to eliminate the material adverse change condition for its standby commitment in relation to a decline in Ivanhoe's share price.
Rio Tinto would be continuing to provide a standby commitment for the full amount of the $1.8 billion rights offering, subject to certain conditions including the price for Ivanhoe's common shares on the NYSE not falling below the subscription price at any time on or after the fifth business day before the expiry of the rights. Under the standby commitment, Rio Tinto is required to acquire any Ivanhoe common shares not taken up under the rights offering.
The amendment includes removing the previously announced $8.34 subscription price for the rights offering. Rio Tinto and Ivanhoe have agreed to price the rights offering in the final prospectus.
In consideration of eliminating the material adverse change clause for a decline in Ivanhoe's share price, re-pricing the exercise price of the Series D Warrants to $10.84 per share, subject to adjustment upon completion of the rights offering; and confirming the standby commitment fee will be paid in cash. Rio Tinto has agreed to waive its previously announced entitlement to reinvest its standby commitment fee in Ivanhoe common shares.
Copyright RTT News/dpa-AFX
© 2012 AFX News
