Mining giant gives back US$3.2bn to shareholders with Allens’ aid

Allens has again acted for long-standing client Rio Tinto, this time in a billion-dollar buy-back program.

The top-tier firm advised the Anglo-Australian resources giant on the disbursement of about US$3.2bn of post-tax coal disposal proceeds to shareholders. Allens said advised on all corporate and tax aspects of the program, which combines an off-market buy-back tender targeting up to 41.2 million Rio Tinto Limited shares with further on-market purchases of Rio Tinto plc shares.

The transaction comes after Rio Tinto disposed of its coal assets in Queensland in April in a $4.15bn staged sell-down Allens also provided legal advice on. Funding for the buyback program comes from proceeds of these sales.

Allens also advised Rio Tinto when it sold Coal & Allied to Yancoal for US$2.69bn, which was 2017’s largest mining deal in Australia.

The off-market buy-backs are expected to be completed by November, after which the timing and total maximum consideration for the on-market buy-backs will be revealed.

Partner Richard Kriedemann, who led the Allens corporate team on the matter, said Rio Tinto continues to provide market-leading  returns for shareholders.

“Off-market share buy-backs continue to have a valuable role to play in delivering efficient capital management for shareholders,” said Partner Martin Fry, who led the firm’s tax team.

Kriedemann and Martin were supported by special counsel Gadi Bloch and senior associate Jay Prasad, respectively.

Richard Kriedemann