bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Eric Ng

Aluminum Corp of China (Chinalco) is reportedly negotiating with liquidators of the collapsed investment bank Lehman Brothers Holdings to retrieve multibillion US dollars worth of shares in Australian mining major Rio Tinto.
Chinalco was in urgent talks with the liquidators in Hong Kong to get back the 12 per cent stake in London-listed Rio Tinto it bought with United States metals giant Alcoa  in February, Britain's Daily Telegraph reported yesterday.
The paper quoted  sources as saying that the liquidators might decide that Chinalco only ranked at par with other Lehman creditors in claims and might suffer a substantial loss in the worst-case scenario.
It added that Beijing had put pressure on Hong Kong to hand over the stake so that Chinalco could deposit it with another custodian.
Patrick Cowley, a liquidator at KPMG responsible for the settlement of Lehman's Asian assets, said: 'We don't discuss ongoing cases.'
Chinalco's spokesman could not be reached. Lehman would not comment.
Chinalco has about 10 per cent of the 12 per cent stake in Rio Tinto that it bought with  Alcoa for US$14.05 billion. The deal was the biggest overseas acquisition by a mainland company.
Tung Tai Securities associate director of research Kenny Tang Sing-hing said it was not uncommon for investors to put acquired shares at the brokerage  that had provided them financing,  but the company found the shares frozen when the brokerage collapsed.
'Those shares would have been pledged with the brokerage as collateral, so they may be sold to repay the failed brokerage's creditors,'  Mr Tang said. 'However, if the investors can prove that they have not used the brokerage's credit facilities or have already repaid whatever they borrowed, they can negotiate to retrieve their shares.'
The 1998 collapse of Hong Kong brokerage CA Pacific   and the settlements  provided an example, he said.
Chinalco has never disclosed if Lehman had funded the purchase of the Rio stake. Rio shares  have tumbled 62.73 per cent since Chinalco and Alcoa bought the stake on February 13 to GBP20.50 (HK$273.70)  by late London trade yesterday.
The deal was  seen as a move aimed  at blocking a proposed  acquisition of Rio by  BHP Billiton, at the time valued at  US$147.4 billion.
The potential merger would create a behemoth controlling the supply and prices of more than 30 per cent of the world's seaborne-traded iron ore and millions of tonnes of copper and bauxite, metals heavily imported by China.
Frozen assets
Rio Tinto deal was the biggest foreign purchase by a mainland company
Stake in the Australian miner bought by Chinalco and Alcoa in February: 12%



China’s Chalco, Rio Tinto buy Brazil’s CBA for US$886 million to tighten mineral grip

First China ore shipment rewards Guinea coup leader’s push for Simandou alliance

Mainland Chinese miner Zijin’s founder who built US$100 billion firm retires

EU’s investment bank to work with Australian government on critical raw materials

Rio Tinto Group

Chinalco seeks to retrieve Lehman-held Rio shares