Pre-Annual General Meeting Information • May 19, 2017
Pre-Annual General Meeting Information
Open in ViewerOpens in native device viewer
(incorporated and registered in England and Wales with registered number 719885)
Proposed disposal of Coal & Allied Industries Limited
to
Yancoal Australia Limited
and
Notice of Rio Tinto plc General Meeting
Shareholder Helpline
0800 435 021 (within the United Kingdom)
+44 (0) 370 703 6364 (outside the United Kingdom)
[THIS PAGE INTENTIONALLY LEFT BLANK]
THIS DOCUMENT AND THE ACCOMPANYING PROXY FORM ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended to seek your own financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent professional adviser who, if you are taking advice in the United Kingdom, is authorised pursuant to the FSMA or from an appropriately authorised independent financial adviser if you are in a territory outside the United Kingdom.
If you have sold or otherwise transferred all of your Rio Tinto plc Shares, please send this document, together with the accompanying Proxy Form, as soon as possible to the purchaser or transferee, or to the stockbroker, bank or other agent through or to whom the sale or transfer was effected for delivery to the purchaser or transferee. The release, publication or distribution of this document in certain jurisdictions other than the United Kingdom may be restricted by laws of those jurisdictions and therefore persons in such jurisdictions into which this document is released, published or distributed should inform themselves about and observe any such restrictions.
(incorporated and registered in England and Wales with registered number 719885)
Proposed disposal of Coal & Allied Industries Limited
to
Yancoal Australia Limited
and
Notice of Rio Tinto plc General Meeting
This document should be read as a whole. Your attention is drawn to the letter from the Chairman of Rio Tinto which is set out on pages 4 to 8 of this document and which contains the recommendation of the Board that you vote in favour of the Transaction and the resolution to be proposed at the Rio Tinto plc General Meeting convened by the notice set out in this document.
Notice of the Rio Tinto plc General Meeting, to be held at 11.00 a.m. on 27 June 2017 at The Queen Elizabeth II Conference Centre, Broad Sanctuary, Westminster, London, SW1P 3EE, United Kingdom, is set out at the end of this document. Rio Tinto plc Shareholders will find enclosed with this document a Proxy Form for use in connection with the Rio Tinto plc General Meeting. To be valid, the Proxy Form should be completed, signed and returned, with any power of attorney under which it is executed (or a duly certified copy of any such power), to the transfer office of Rio Tinto plc at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY, United Kingdom as soon as possible and in any event by no later than 11.00 a.m. on 23 June 2017.
As an alternative to completing a hard copy Form of Proxy, Rio Tinto plc Shareholders can appoint a proxy by electronic means by visiting www.computershare.co.uk/eproxy. Further details are set out in the notes to the Notice of the Rio Tinto plc General Meeting at the end of this document. If you hold Rio Tinto plc Shares in CREST, you may use the CREST electronic proxy appointment service, instructions for which are contained in note 6 to the Notice of the Rio Tinto plc General Meeting at the end of this document.
Completion and return of a completed Proxy Form, Electronic Proxy Appointment or CREST proxy instruction will not prevent you from attending and voting in person at the Rio Tinto plc General Meeting, or any adjournment thereof, if you so wish and are so entitled.
If you hold Rio Tinto plc ADRs, you will receive an ADR Voting Instruction Card from the ADR Depositary which will enable you to vote in respect of the matters to be considered at the Rio Tinto plc General Meeting.
This document does not constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security.
Deutsche Bank is authorised under German banking law (competent authority: European Central Bank and BaFin, Germany's Federal Financial Supervisory Authority) and by the Prudential Regulation Authority in the United Kingdom, and is subject to supervision by the European Central Bank and by BaFin, and limited regulation in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority. Deutsche Bank has been appointed as financial adviser to, and sponsor for, Rio Tinto plc, and no-one else in connection with the Transaction and will not be responsible to anyone other than Rio Tinto plc for providing the protections afforded to clients of Deutsche Bank, nor for providing advice in relation to the Transaction, or the contents of this document.
Rio Tinto plc Shareholders should rely only on the information contained in this document. No person has been authorised to give any information or to make any representations other than those contained in this document in connection with the Transaction and, if given or made, such information or representations must not be relied upon as having been authorised by or on behalf of Rio Tinto, the Directors or Deutsche Bank. No representation or warranty, express or implied, is made by Deutsche Bank as to the accuracy or completeness of such information, and nothing contained in this document is, or shall be relied upon as, a promise or representation by Deutsche Bank as to the past, present or future.
Nothing in this document constitutes the provision of financial product advice by Deutsche Bank or its related parties for the purposes of the Australian Corporations Act 2001. All liability of Deutsche Bank or its related bodies, respective directors, officers, employees, advisers, servants and agents to any recipient of this document or to any person or entity (other than Rio Tinto) arising out of this document or its content is to the maximum extent permitted by law expressly disclaimed and excluded. The contents of this document are not to be construed as legal, business, financial or tax advice. Each Rio Tinto Shareholder should consult his or her own lawyer, financial adviser or tax adviser for legal, financial or tax advice in relation to the Transaction.
Unless otherwise indicated, financial information for Coal & Allied Industries in this document is presented in US\$ and has been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and interpretations issued from time to time by the IFRS Interpretations Committee which are mandatory as at 31 December 2016. Certain figures included in this document have been subject to rounding adjustments.
Some words and expressions used in this document have defined meanings, which are set out in Part III (Definitions) of this document. A reference to time in this document is to London time (unless otherwise stated) for events in the UK or Australian Eastern Standard Time (unless otherwise stated) for events occurring in Australia.
This document contains statements which constitute "forward-looking statements" about Rio Tinto. The words "intend", "aim", "project", "anticipate", "estimate", "plan", "believes", "expects", "may", "should", "will", or similar expressions, commonly identify such forward-looking statements.
Examples of forward-looking statements in this document include, among others, statements regarding the proposed Transaction; the financial condition, results of operations or economic conditions affecting the business of Rio Tinto; future implications of the Transaction; and management plans and objectives. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors set forth in this document that are beyond Rio Tinto's control.
In light of these risks, uncertainties and assumptions, actual results could be materially different from projected future results expressed or implied by these forward-looking statements which speak only as at the date of this document. Except as required by applicable regulations or by law, Rio Tinto does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events. Rio Tinto cannot guarantee that its forward-looking statements will not differ materially from actual results.
| LETTER FROM THE CHAIRMAN OF RIO TINTO | 4 |
|---|---|
| EXPECTED TIMETABLE OF PRINCIPAL EVENTS | 9 |
| PART I DETAILS OF THE TRANSACTION | 10 |
| PART II ADDITIONAL INFORMATION . |
15 |
| PART III DEFINITIONS | 18 |
| NOTICE OF GENERAL MEETING | 22 |
(Incorporated and registered in England and Wales with registered number 719885)
6 St James's Square, London, SW1Y 4AD, United Kingdom
19 May 2017
Dear Shareholder
On 24 January 2017, Rio Tinto announced that it had reached a binding agreement for the sale of its 100 per cent. interest in the issued share capital of Coal & Allied Industries to Yancoal. Under the Transaction, the total purchase price payable by Yancoal amounts to US\$2.45 billion, comprising:
After the Transaction is completed, Rio Tinto will potentially also be entitled to royalties.
Subject to all approvals and other conditions precedent being satisfied, it is expected that the Transaction will complete during the third quarter of 2017.
Under the UK Listing Rules, a transaction (other than a transaction in the ordinary course of business) between a listed company and a related party requires the approval of the shareholders of the listed company. For the purposes of the UK Listing Rules, Yancoal is considered to be a related party of Rio Tinto and the Transaction is considered to be a related party transaction requiring the approval of Rio Tinto Shareholders.
Under the ASX Listing Rules, the acquisition or disposal of a substantial asset by a listed company from or to a person in a position of influence requires the approval of the shareholders of the listed company. For the purposes of the ASX Listing Rules, Coal & Allied Industries is considered to be a substantial asset of Rio Tinto and Yancoal is considered to be a person in a position of influence in relation to Rio Tinto, and the Transaction is accordingly considered to be a transaction requiring the approval of Rio Tinto Shareholders.
Accordingly, the Rio Tinto plc General Meeting has been convened for 11.00 a.m. on 27 June 2017 at The Queen Elizabeth II Conference Centre, Broad Sanctuary, Westminster, London, SW1P 3EE, United Kingdom and the Rio Tinto Limited General Meeting has been convened for 11.00 a.m. (Australian Eastern Standard Time) on 29 June 2017 at the Grand Ballroom, The Westin Sydney, 1 Martin Place, Sydney, New South Wales, Australia. As a Rio Tinto plc Shareholder, you will be asked to approve the Transaction at the Rio Tinto plc General Meeting.
The Board considers the Transaction to be fair and reasonable as far as Rio Tinto plc Shareholders are concerned and in the best interests of Rio Tinto Shareholders as a whole. Accordingly, the Board recommends that you vote in favour of the Resolution as each member of the Board intends to do in respect of any Rio Tinto Shares over which he or she has voting control.
The divestment of Coal & Allied Industries is consistent with Rio Tinto's strategy of continuously reviewing its asset portfolio and seeking attractive opportunities for the most effective re-allocation of capital to ensure Rio Tinto delivers superior returns for its shareholders. Rio Tinto has announced or completed at least US\$7.7 billion of divestments since 2013. The Transaction represents the latest divestment undertaken by Rio Tinto to ensure the most effective use of capital and delivery of returns for Rio Tinto Shareholders.
These recent divestments include the sale of Rio Tinto's interests in the Clermont coal mine, the Bengalla coal mine and the Mount Pleasant coal project. In addition, prior to the sale of Rio Tinto's interest in the Bengalla coal mine and the Mount Pleasant coal project, a restructuring of the ownership of Coal & Allied Industries' assets was completed in 2016 with the Mitsubishi Group (Rio Tinto's joint venture partner) pursuant to which Rio Tinto agreed to assume 100 per cent. ownership of Coal & Allied Industries and the Mitsubishi Group agreed to move from holding a 20 per cent. interest in Coal & Allied Industries to holding a direct 32.4 per cent. interest in the Hunter Valley Joint Venture.
The Transaction represents the culmination of an extensive assessment of all strategic options for Coal & Allied Industries' assets. Rio Tinto has conducted a comprehensive market testing and price discovery process and has held extensive discussions with several potential acquirers of Coal & Allied Industries' assets. The Board of Rio Tinto believes that the terms of the Coal & Allied Industries sale, which have been agreed with Yancoal, represent compelling value for Rio Tinto Shareholders.
Yancoal is listed on the ASX. Rio Tinto understands that Yancoal owns and operates a portfolio of nine coal mines, numerous projects under feasibility study, a suite of exploration assets and infrastructure shareholdings across NSW, Queensland and Western Australia.
Coal & Allied Industries is the holding company for Rio Tinto's thermal coal business in the Hunter Valley region of NSW. Coal & Allied Industries owns and operates multiple, multi-seam open cut mines in the Hunter Valley. It has a 67.6 per cent. interest in the Hunter Valley Operations mine, an 80 per cent. interest in the Mount Thorley mine, a 55.6 per cent. interest in the Warkworth mine, a 36.5 per cent. interest in Port Waratah Coal Services (which owns a coal export terminal located at the Port of Newcastle) and other undeveloped coal assets, including various landholdings.
The Hunter Valley Operations, Mount Thorley and Warkworth mines together produced 25.9 million tonnes of saleable thermal and semi-soft coking coal in 2016 (17.1 million tonnes being Rio Tinto's share). The net assets subject to the Transaction had earnings before tax of US\$258 million in the year to 31 December 2016, and a gross asset value attributable to them of US\$1,418 million as at 31 December 2016.1
Recent geopolitical developments have led to volatility permeating across global markets and this volatility is expected to remain an ongoing feature of seaborne coal markets. However, thermal coal is a cost-effective and abundant energy source that plays an important role in the global energy mix and its medium to long term demand outlook remains sound even if pricing could be more volatile.
Last year saw significant changes in the supply and demand balance, driving spot prices for both thermal and metallurgical coal from low levels early in 2016 to favourable highs in the second half of the year. The changing market dynamics were primarily driven by changes in Chinese policy, curtailing supply through the implementation of restricted operating days for coal mines. This directive has since been relaxed, however uncertainties are likely to continue to affect coal markets in the short to medium term.
Even though market prices for both thermal and metallurgical coal remain firm, producers are wary of the potential for rapid fluctuations in market conditions. Ongoing achievements by Coal & Allied Industries in reducing costs and improving productivity at its operations in the Hunter Valley have ensured they are well positioned to be resilient for changes in the macro-economic environment.
In the medium to long term, it is anticipated that strong energy demand in the developing economies, particularly China and India, combined with the rising costs and logistical constraints associated with domestic production in these countries, will provide some support for seaborne thermal and metallurgical coal markets.
Completion of the Transaction will deliver to Rio Tinto an initial cash payment of US\$1.95 billion, payable at completion and US\$500 million in aggregate deferred cash payments, payable as annual instalments of US\$100 million over the five years following completion of the Transaction.
1 This financial information has been prepared under International Accounting Standards and Rio Tinto accounting policies, and reflects the financial results attributable to the net assets subject of the sale to Yancoal. The financial information given above reflects the results of a restructure to the Coal & Allied Industries group completed on 3 February 2016 in which Rio Tinto obtained 100 per cent. ownership of Coal & Allied Industries and a 67.6 per cent. interest in the Hunter Valley Operations joint venture. Earnings before tax and gross assets attributable to Coal & Allied Industries' former ownership of the Mount Pleasant project and a 40 per cent. interest in the Bengalla joint venture have been excluded.
In addition, Rio Tinto will become entitled to a quarterly coal price linked royalty calculated as US\$2 per tonne (subject to an annual Australian CPI adjustment over the term of the royalty) of attributable saleable production (excluding certain production) from subsidiaries of Coal & Allied Industries, for a period of 10 years beginning on the third anniversary of completion. This royalty will be payable if the Newcastle benchmark thermal coal price exceeds US\$75 per tonne (subject to an annual Australian CPI adjustment over the term of the royalty). The aggregate amount of royalties is subject to a US\$650 million cap.
In addition to the cash consideration payable by Yancoal upon completion of the Transaction and Rio Tinto's future royalties entitlement:
The SPA contains customary terms and conditions that restrict Rio Tinto from soliciting a competing proposal from any third party, or entering into negotiations or discussions in relation to a competing proposal with any third party, subject to customary exceptions if the Board determines that a competing proposal is (or is reasonably likely to become) a superior proposal available to Rio Tinto and that compliance with the restriction would constitute a breach of their fiduciary or statutory duties. Please refer to section 5 of Part I (Details of the Transaction) for further information.
In accordance with Rio Tinto's obligations under the HVO Joint Venture Agreement, Rio Tinto will procure that Yancoal also make a 'tag' offer to the relevant Mitsubishi Group member to acquire its 32.4 per cent. interest in the Hunter Valley Joint Venture, subject to any contrary arrangements agreed between Yancoal and the Mitsubishi Group. Please refer to section 6 of Part I (Details of the Transaction) for further information.
Completion of the Transaction is not expected to have a material impact on Rio Tinto's earnings per share.
Rio Tinto will use the consideration received from the Transaction for general corporate purposes. In the near term, completion of the Transaction will reduce the net indebtedness of Rio Tinto.
Prior to making any decision to vote in favour of the proposed Transaction, Rio Tinto Shareholders should carefully consider, together with all other information contained in this document, the specific factors and risks described below. Rio Tinto considers the following to be the main factors relating to the Transaction for Rio Tinto Shareholders to consider:
• Rio Tinto Shareholders might also wish to retain exposure to the interests being sold as part of the Transaction and to share in the potential value that could be generated by Coal & Allied Industries in the future.
Yancoal intends to fund the Transaction by way of a capital raising and pro-rata renounceable rights issue of ordinary shares. The Yancoal rights issue is expected to occur in the third quarter of 2017.
The Transaction is subject to certain conditions being satisfied, including regulatory approvals (approval from the NSW Minister for Resources, Chinese regulatory approvals, Chinese anti-trust approval, South Korean anti-trust approval, which was received on 26 April 2017, and Australian foreign investment approval, receipt of which was confirmed by Yancoal in an announcement on 13 April 2017) and consent from BLCP to the novation to a Yancoal Group entity of all the rights and obligations of Rio Tinto under the Coal Supply and Transportation Agreement (or the establishment of alternative supply arrangements). The Transaction is also subject to a vote by the shareholders of Yanzhou. Yankuang, which owns 56 per cent. of Yanzhou, has irrevocably undertaken to vote in favour of the Transaction at the Yanzhou shareholder meeting.
There is a risk that one or more of these conditions may not be satisfied, which could cause the Transaction not to complete.
The Transaction is a related party transaction for the purposes of the UK Listing Rules and requires shareholder approval pursuant to those rules as well as under the ASX Listing Rules.
Under the UK Listing Rules, any person who is entitled to exercise, or to control the exercise of, 10 per cent. or more of the votes able to be cast on all or substantially all matters at general meetings of a listed company is considered, with its associates, to be a related party of that listed company.
Chinalco holds a 13.10 per cent. interest in Rio Tinto plc through Shining Prospect Pte. Ltd. Therefore, Chinalco and its associates are considered to be related parties of Rio Tinto plc. Chinalco is controlled by the State-owned Assets Supervision and Administration Commission of the State Council of the People's Republic of China. Accordingly, under the UK Listing Rules any state-owned entity ultimately controlled by the State Council of the People's Republic of China is considered to be an associate of Chinalco and a related party of Rio Tinto.
Yancoal is 78 per cent. owned by Yanzhou and Yanzhou is 56 per cent. owned by Yankuang. Yankuang is controlled by the State-owned Assets Supervision and Administration Commission of Shandong Province in the People's Republic of China. Under the UK Listing Rules, Yancoal is considered to be an associate of Chinalco and therefore also a related party of Rio Tinto.
Accordingly, the Transaction is a related party transaction requiring Rio Tinto Shareholder approval pursuant to UK Listing Rule 11.1.7. Since the Transaction is between Rio Tinto and Yancoal, Yancoal has undertaken not to vote on the Resolution at the Rio Tinto plc General Meeting and the Rio Tinto Limited General Meeting and to take all reasonable steps to ensure that its associates will not vote on the Resolution at such meetings. As at 17 May 2017, being the latest practicable date prior to the publication of this document, Rio Tinto was not aware that Yancoal held any Rio Tinto Shares. As the Transaction is classified as a Class 2 transaction under the UK Listing Rules, Rio Tinto Shareholders will not be asked to approve the Transaction for the purposes of Chapter 10 of the UK Listing Rules.
Yancoal is also considered to be an associate of Chinalco for the purposes of ASX Listing Rule 10.1 as a result of Chinalco and Yankuang each being owned by Chinese state-owned entities as described above. Since Coal & Allied Industries is considered a substantial asset of Rio Tinto, the Transaction also requires Rio Tinto Shareholder approval pursuant to ASX Listing Rule 10.1.
Accordingly, the Transaction is conditional on shareholders at the Rio Tinto plc General Meeting and the Rio Tinto Limited General Meeting approving the Transaction as a joint electorate by way of ordinary resolution. The Rio Tinto plc General Meeting will be held at 11.00 a.m. on 27 June 2017 and the Rio Tinto Limited General Meeting will be held at 11.00 a.m. (Australian Eastern Standard Time) on 29 June 2017. The Notice convening the Rio Tinto plc General Meeting is set out at the end of this document.
The result of the vote to approve the Transaction under the joint electorate procedure will be determined when the relevant polls are closed at the end of the Rio Tinto Limited General Meeting. The overall results will be announced to the relevant stock exchanges and posted on Rio Tinto's website shortly after the end of that meeting.
You will find enclosed a Proxy Form for use at the Rio Tinto plc General Meeting. Whether or not you intend to be present at the Rio Tinto plc General Meeting, you are requested to complete the Proxy Form and return it as soon as possible and in any case so as to be received by no later than 11.00 a.m. on 23 June 2017.
As an alternative to completing a hard copy Form of Proxy, Rio Tinto plc Shareholders can appoint a proxy by electronic means by visiting www.computershare.co.uk/eproxy. Further details are set out in the notes to the Notice of the Rio Tinto plc General Meeting at the end of this document. If you hold Rio Tinto plc Shares in CREST, you may use the CREST electronic proxy appointment service, instructions for which are contained in note 6 to the Notice of the Rio Tinto plc General Meeting at the end of this document.
The completion and return of a completed Proxy Form, Electronic Proxy Appointment or CREST proxy instruction will not prevent you from attending and voting in person at the Rio Tinto plc General Meeting, or any adjournment thereof, if you so wish and are so entitled. To facilitate entry into the Rio Tinto plc General Meeting, Rio Tinto plc Shareholders are requested to bring with them the attendance card, which is attached to the Proxy Form.
If you have sold or otherwise transferred all of your Rio Tinto plc Shares, you should send this document, together with the accompanying documents, at once to the purchaser or transferee or to the stockbroker, bank or other agent through or to whom the sale or transfer was effected for delivery to the purchaser or transferee. However, such documents should not be forwarded or transmitted in or into any jurisdiction in which such act would constitute a violation of the relevant laws in such jurisdiction. If you have sold or transferred part of your holding of Rio Tinto plc Shares, please consult the bank, stockbroker or other agent through whom the sale or transfer was effected.
If you have any questions in relation to the Transaction, please contact the Rio Tinto Shareholder Helpline on 0800 435 021 (within the United Kingdom) or +44 (0) 370 703 6364 (outside the United Kingdom), or visit the Rio Tinto website at www.riotinto.com.
Your attention is drawn to the additional information contained in Parts I to III of this document. You are advised to read the whole document and not merely rely on the key or summarised information in this letter from the Chairman of Rio Tinto.
The Rio Tinto Limited Circular contains an Independent Expert's Report to the directors of Rio Tinto Limited opining on the fairness and reasonableness of the Transaction to Rio Tinto Limited Shareholders. The Independent Expert's Report has been prepared solely for the purpose of complying with the ASX Listing Rules. The Independent Expert is required to be independent from Rio Tinto in accordance with Regulatory Guide 112 issued by the Australian Securities and Investments Commission.
The Board of Rio Tinto plc, which has been so advised by Deutsche Bank, considers that the Transaction is fair and reasonable as far as the Rio Tinto plc Shareholders are concerned. In providing financial advice to the Board, Deutsche Bank has taken into account the commercial assessments of the Board. The Board also considers that the Transaction is in the best interests of Rio Tinto Shareholders as a whole.
Accordingly, the Board recommends that you vote in favour of the Resolution as each member of the Board intends to do in respect of any Rio Tinto Shares over which he or she has voting control (such Rio Tinto Shares (in aggregate) representing approximately 0.007 per cent. of voting power in Rio Tinto on joint decision matters).
Yours faithfully
Jan du Plessis
Chairman
Each of the times and dates in the table below is indicative only and may be subject to change.
| Latest time and date for receipt of Proxy Forms, Electronic Proxy Appointments and CREST proxy instructions for the Rio Tinto plc General Meeting |
11.00 a.m. on 23 June 2017 |
|---|---|
| Rio Tinto plc General Meeting | 11.00 a.m. on 27 June 2017 |
| Rio Tinto Limited General Meeting | 11.00 a.m. (Australian Eastern Standard Time) on 29 June 2017 |
| Completion of the Transaction (subject to approvals) |
During the third quarter of 2017 |
Notes:
(1) The times and dates set out in the expected timetable of principal events above and mentioned throughout this document may be adjusted by Rio Tinto in which event details of the new times and dates will be notified to the FCA and the London Stock Exchange.
(2) References to times in this timetable are to London time unless otherwise stated.
Yancoal has entered into the SPA with the Vendor and HVR in relation to the sale of all of the issued shares in Coal & Allied Industries.
The total purchase price payable by Yancoal comprises an initial payment of US\$1.95 billion, payable at completion of the Transaction and US\$500 million in aggregate deferred cash payments, payable as annual instalments of US\$100 million over the five years following completion of the Transaction.
Yancoal, through certain subsidiaries of Coal & Allied Industries, must also pay a coal price linked royalty, which is determined as US\$2 per tonne (subject to an annual Australian CPI adjustment over the term of the royalty) of attributable saleable coal production (excluding certain production) from Coal & Allied Industries for a period of 10 years beginning on the third anniversary of completion. This royalty is payable if the Newcastle benchmark thermal coal price exceeds US\$75 per tonne (subject to an annual Australian CPI adjustment over the term of the royalty). The aggregate amount of royalties is subject to a US\$650 million cap (see section 11 of this Part I (Details of the Transaction)).
In addition to the cash consideration payable by Yancoal upon completion of the Transaction and Rio Tinto's future royalties entitlement:
The completion-related obligations on the parties under the SPA do not become binding unless and until each of the following conditions are satisfied (or waived, where applicable):
On 13 April 2017, Yancoal issued an announcement to the effect that it had received confirmation from the Foreign Investment Review Board of the Treasurer of Australia's approval of the Transaction. On 26 April 2017, Yancoal received merger control clearance from the Korea Fair Trade Commission.
Yancoal may terminate the SPA before completion if:
The Vendor or Yancoal may terminate the SPA before completion if:
The Vendor may terminate the SPA before completion if the BLCP consent condition has not been fulfilled or waived and the Vendor considers that pursuing an alternative commercial approach with respect to the Coal Supply and Transportation Agreement of the type described in section 10 of this Part I (Details of the Transaction) would be likely to result in material adverse consequences for Rio Tinto.
The SPA will terminate automatically if any customer of or supplier to the Vendor, HVR or Coal & Allied Industries or any of its subsidiaries obtains an injunction preventing the Vendor or HVR from fulfilling its completion obligations under the SPA.
During the period from the date of the SPA until completion or termination of the SPA, the Vendor and its related bodies corporate must not (subject to certain limited customary carve-outs):
The restrictions described above (other than the restriction described in the first bullet) are subject to a fiduciary carve out, such that they do not apply where the Board determines that the competing proposal is a 'Superior Proposal' and compliance with the restrictions would be a breach of their directors' duties, or that compliance with the restrictions would otherwise be unlawful. This carve out only applies until the date on which the Rio Tinto Shareholders have approved the Transaction.
In summary, 'Superior Proposal' is defined in the SPA as a bona fide competing proposal for the acquisition of 100 per cent. of the shares in Coal & Allied Industries for a total cash consideration having a net present value that exceeds Yancoal's proposed consideration by at least US\$100 million, and which is reasonably considered to be no more conditional than the Transaction (including based on relative completion time frames), and which would be more favourable to the Rio Tinto Shareholders than the Transaction. The Board is to determine whether a bona fide competing proposal constitutes a Superior Proposal.
If the Vendor receives a competing proposal, it must (subject to a fiduciary carve-out) provide details of the party making the competing proposal and the material terms of the proposal to Yancoal within five business days of receipt.
If the Board determines that a competing proposal is a Superior Proposal, then Rio Tinto must not enter into that Superior Proposal until Yancoal has had the opportunity to present a counter offer within five business days of being notified of such Superior Proposal. If the Board determines in good faith that the counter offer is no less favourable than the Superior Proposal, then the parties must seek to enter into documentation to give effect to the counter offer as soon as reasonably practicable.
Coal & Allied Industries is a party to the HVO Joint Venture Agreement (through its subsidiary Coal & Allied Operations Pty Ltd). Under the HVO Joint Venture Agreement, a Mitsubishi Group member has tag-along rights that are triggered by the Transaction. As required by the SPA, Yancoal must make an offer to the Mitsubishi Group member to acquire its 32.4 per cent. interest in the Hunter Valley Joint Venture in accordance with the HVO Joint Venture Agreement, subject to any contrary arrangements agreed between Yancoal and the Mitsubishi Group. The HVO Joint Venture Agreement contains a mechanism for determining the price to be offered to the Mitsubishi Group for its interest in the Hunter Valley Joint Venture, which involves determination of fair market value by agreement between the parties or, in default of such agreement, by an independent valuer. Once the fair market value has been determined and an offer has been made, the Mitsubishi Group may elect to accept or reject that offer.
As at 17 May 2017, being the latest practicable date prior to the publication of this document, the parties had agreed to extend the timetable for the tag-along process to allow for further discussion between the Mitsubishi Group and Yancoal.
Each of the parties to the SPA has given warranties that are considered customary for a transaction of this nature.
The Vendor and HVR must conduct the business of Coal & Allied Industries in the ordinary course between signing of the SPA and completion of the Transaction. This includes carrying on the business in accordance with all approved budgets and business plans (including those relating to any joint ventures). The Vendor and HVR are also subject to certain specific restrictions, including in relation to incurring material capital commitments, relinquishing mining tenements, disposing of assets and other restrictions that may be considered customary for a transaction of this nature.
The parties to the SPA have agreed that a Transitional Services Agreement will be entered into upon completion of the Transaction between a related body corporate of the Vendor, Rio Tinto Services Limited, and Coal & Allied Industries. The Transitional Services Agreement relates to the provision of various services for short specified periods (up to six months following completion of the Transaction), depending on the nature of the services. Services to be provided under the Transitional Services Agreement include IST support services, orebody knowledge support, strategic mine planning support, health, safety and environment support, government approvals support, accounting support and payroll support. Coal & Allied Industries must pay a fee for the provision of these services of cost plus 7.5 per cent. The Transitional Services Agreement has a basic term of six months (with IST services to be provided for the six-month term and shorter terms of one to three months for the remaining services). Notwithstanding these agreed service terms, Coal & Allied Industries must use its best endeavours to take over performance of the services itself, or procure a third party to perform them, as soon as possible after completion of the Transaction. Rio Tinto Services Limited's liability under the Transitional Services Agreement is capped at the total amount of the service fees it receives.
The Coal Supply and Transportation Agreement was entered into between the Vendor and BLCP on 13 June 2003, as amended on 25 May 2009. Coal from the Warkworth, Mount Thorley and Hunter Valley coal operations is currently delivered to BLCP by the Vendor under the Coal Supply and Transportation Agreement. Specifically, the Vendor must supply a minimum annual quantity of 2,560,000 tonnes of coal and a maximum annual quantity of 3,627,000 tonnes of coal to BLCP. The term of the Coal Supply and Transportation Agreement extends until January 2032. The Vendor has the right to exclusively supply BLCP until BLCP purchases the maximum quantity (subject to certain limited exceptions) from the Vendor. A supply schedule is agreed between the parties each year that must provide for the supply of at least the minimum quantity to BLCP. The Coal Supply and Transportation Agreement contains a take or pay obligation on BLCP to take the minimum quantity.
It is intended that the Coal Supply and Transportation Agreement will be novated from the Vendor to a Yancoal Group entity on and from completion of the Transaction pursuant to a BLCP Novation Deed. However, if this does not occur and the Vendor does not terminate the SPA in such circumstances on the basis set out in section 4 of this Part I (Details of the Transaction), then the Vendor and Yancoal Sales will enter into back-to-back arrangements contained in the BLCP Back-to-Back Agreement such that Yancoal Sales will make coal available to the Vendor to enable the Vendor's ongoing compliance with the Coal Supply and Transportation Agreement.
Whether or not the Coal Supply and Transportation Agreement is novated to a Yancoal Group entity, certain other agreements will be entered into as described below:
As indicated in section 1 of this Part I (Details of the Transaction), the Vendor has also acquired a right to be paid royalties in respect of Coal & Allied Industries' share of certain coal production from the Warkworth, Mount Thorley and Hunter Valley coal operations. These royalties are set out in four separate royalty deeds that will be entered into before completion of the Transaction in accordance with the SPA.
The royalty period is 10 years commencing on the day after the third anniversary of completion of the Transaction and expiring on the thirteenth anniversary of completion of the Transaction, or the last day of the calendar quarter during which the aggregate amount of royalty payments under all Royalty Deeds reaches the cap amount of US\$650 million, whichever is earlier.
The amount of the royalty payable under each Royalty Deed is US\$2 per tonne (annually indexed to Australian CPI over the term of the royalty) of attributable saleable production. The royalties are payable on a quarterly basis, and are only payable in respect of a given quarter if the Newcastle benchmark thermal coal price for that quarter exceeds the threshold amount of US\$75 per tonne (annually indexed to Australian CPI over the term of the royalty). The total amount of royalties payable under all Royalty Deeds is capped at US\$650 million. The royalties are not payable on production of amounts required for delivery to BLCP under the Coal Supply and Transportation Agreement or coal extracted from any future underground mining.
If there is an adjustment in the purchase price due to certain outstanding subordinate approvals relating to the Warkworth mining operations not being obtained (referred to in section 1 of this Part I (Details of the Transaction)), the royalties payable under the Royalty Deeds relating to the Warkworth and Mount Thorley coal operations will, in the case of coal production from the area affected by the failure to obtain the relevant subordinate approvals, not be subject to the benchmark thermal coal price threshold referred to above.
As at 17 May 2017, being the latest practicable date prior to the publication of this document, and so far as is known to Rio Tinto by virtue of notifications made to it pursuant to the UK Disclosure Guidance and Transparency Rules, the following persons, directly or indirectly, had an interest in three per cent. or more of the issued ordinary share capital of Rio Tinto plc (excluding treasury shares):
| Shareholder | No. of Rio Tinto plc Shares |
Percentage of issued ordinary share capital of Rio Tinto plc |
|---|---|---|
| Shining Prospect Pte. Ltd(1) | 182,550,329 | 13.10 |
| BlackRock, Inc. | 127,744,871 | 8.38 |
| The Capital Group Companies, Inc. |
55,867,795 | 4.02 |
Note:
(1) Shining Prospect is a Singapore-based entity owned by Chinalco.
As at 17 May 2017, being the latest practicable date prior to the publication of this document, and so far as is known to Rio Tinto by virtue of notifications made to it pursuant to the Australian Act, the following persons, directly or indirectly, had an interest in five per cent. or more of the issued ordinary share capital of Rio Tinto Limited:
| Shareholder | No. of Rio Tinto Limited Shares |
Percentage of issued ordinary share capital of Rio Tinto Limited |
|---|---|---|
| Shining Prospect Pte. Ltd(1) . |
See Note (1) | See Note (1) |
| BlackRock, Inc. | 26,656,003 | 6.28 |
(1) In its substantial holding notice filed on 10 June 2009 Shining Prospect, a Singapore-based entity owned by Chinalco disclosed a holding of 182,550,329 Rio Tinto plc Shares which, at that time, through the operation of the Australian Act as modified, gave these entities and their associates voting power of 9.3 per cent. in Rio Tinto on a joint decision matter, making them substantial shareholders of Rio Tinto Limited, as well as of Rio Tinto plc. Rio Tinto plc has subsequently, by notice dated 26 January 2016, disclosed that Shining Prospect's holding of 182,550,329 Rio Tinto plc Shares gave these entities and their associates voting power of 13.1 per cent. in Rio Tinto plc, which in turn would give these entities and their associates voting power of 10.1 per cent. in Rio Tinto on a joint decision matter.
Other than the Transaction Documents, there are no other contracts (not being contracts entered into in the ordinary course of business) which:
There has been no significant change in the financial or trading position of Rio Tinto since 31 December 2016, the date to which the last audited financial statements of Rio Tinto were prepared.
ASX Listing Rule 10.1 provides that an entity or a subsidiary of it must not, without shareholder approval, acquire or dispose of a substantial asset from or to certain persons in a position of influence, including:
For this purpose, an asset is a "substantial asset" if its value, or the value of consideration for it, is (or in ASX's opinion is) five per cent. or more of the equity interests of the entity as set out in the latest accounts given to ASX under the ASX Listing Rules. The agreed purchase price for Coal & Allied Industries under the SPA exceeds that threshold and, as such, Coal & Allied Industries is considered a substantial asset of Rio Tinto.
As a result of Chinalco and Yankuang each being owned by Chinese state-owned entities as described in more detail in section 8 of the letter from the Chairman of Rio Tinto, Yancoal is considered to be an associate of Chinalco for the purposes of ASX Listing Rule 10.1. Accordingly, the Transaction requires Rio Tinto Shareholder approval pursuant to ASX Listing Rule 10.1.
In relation to the seeking of that approval, ASX Listing Rule 10.10.2 requires that an independent expert's report opining on the fairness and reasonableness of the Transaction be prepared. The Independent Expert is required to be independent from Rio Tinto in accordance with Regulatory Guide 112 issued by the Australian Securities and Investments Commission. Accordingly, the Independent Expert's Report has been prepared by the Independent Expert and not by Rio Tinto.
Deutsche Bank has given and has not withdrawn its written consent to the issue of this document with the inclusion herein of the references to its name in the form and context in which they appear.
Copies of the following documents will be available for inspection during normal business hours on any weekday (Saturdays, Sundays and public holidays excepted) at the Rio Tinto plc registered office at 6 St James's Square, London, SW1Y 4AD, United Kingdom, at the Rio Tinto Limited registered office at Level 33, 120 Collins Street, Melbourne, Victoria 3000, Australia, at the offices of Linklaters LLP, One Silk Street, London, EC2Y 8HQ, United Kingdom and at the offices of Allens, Deutsche Bank Place, Corner Hunter & Phillip Streets, Sydney, New South Wales 2000 Australia up to and including the date of the Rio Tinto Limited General Meeting. These documents are also available on Rio Tinto's website at www.riotinto.com:
The above documentation will also be available for inspection for at least 15 minutes prior to and during the Rio Tinto plc General Meeting.
The following definitions apply throughout this document, unless stated otherwise:
| \$, US\$ or cents | the lawful currency of the United States of America. |
|---|---|
| A\$ | the lawful currency of the Commonwealth of Australia. |
| ADRs | the American depositary receipts issued by Rio Tinto plc. |
| ADR Depositary | JPMorgan Chase Bank, N.A. |
| ADR Voting Instruction Card | the voting card for relevant holders of ADRs to give voting instructions to the ADR Depositary in relation to the Rio Tinto plc General Meeting. |
| ASX or Australian Securities Exchange |
ASX Limited (ACN 008624 691) or the financial market operated by that entity (as applicable). |
| ASX Listing Rules | the official listing rules of the ASX, as amended from time to time. |
| Australia | the Commonwealth of Australia. |
| Australian Act | the Australian Corporations Act 2001 (Cth). |
| Bee Creek Contract | the agreement and related side letter to be entered into by Yancoal Sales and Hail Creek Marketing Pty Limited on completion of the Transaction. |
| BLCP | BLCP Power Limited. |
| BLCP Back-to-Back Agreement | the agreement to be entered into by the Vendor and Yancoal Sales on completion of the Transaction in the event that the Coal Supply and Transportation Agreement is not novated from the Vendor to a Yancoal Group entity on completion pursuant to a BLCP Novation Deed. |
| BLCP Novation Deed | the deed of novation in respect of the Coal Supply and Transportation Agreement to be entered into by the Vendor, a Yancoal Group entity and BLCP on completion of the Transaction. |
| Board or Directors | the common boards of directors of Rio Tinto, or, as the context requires, the board of directors of Rio Tinto plc or Rio Tinto Limited. |
| Chinalco | Aluminum Corporation of China, being a Chinese state-owned enterprise established on 23 February 2001. |
| Coal Supply and Transportation Agreement |
the Coal Supply and Transportation Agreement between the Vendor and BLCP dated 13 June 2003, as amended. |
| Coal & Allied Industries | Coal & Allied Industries Limited (ABN 67 008 416 760). |
| Companies Act 2006 | the Companies Act 2006 of England and Wales, as amended. |
| CPI | consumer price index. |
| CREST | the facilities and procedures for the time being of the relevant system of which Euroclear UK & Ireland Limited has been approved as operator pursuant to the UK Uncertificated Securities Regulations 2001, as amended. |
|---|---|
| Deutsche Bank | Deutsche Bank AG, London Branch. |
| DLC Sharing Agreement | the DLC Merger Sharing Agreement, as amended from time to time, between Rio Tinto plc and Rio Tinto Limited dated 21 December 1995, that regulates the relationship between Rio Tinto plc and Rio Tinto Limited. |
| Electronic Proxy Appointment | the facility to lodge proxy appointments by electronic means on a website provided by Computershare Investor Services PLC in relation to the Rio Tinto plc General Meeting. |
| Financial Conduct Authority or FCA | the UK Financial Conduct Authority. |
| Freight Transfer Deed | the deed of novation in respect of the Agreement for the Supply of Chartering and Freight Services to Port of Map Ta Phut, Thailand to be entered into by the Vendor, Yancoal Sales and Rio Tinto Shipping (Asia) Pte Limited on completion of the Transaction. |
| FSMA | the UK Financial Services and Markets Act 2000, as amended. |
| Hunter Valley Joint Venture | the unincorporated joint venture known as the 'Hunter Valley Operations Joint Venture' established pursuant to the HVO Joint Venture Agreement. |
| HVO Coal Supply Transfer Deed | the deed to be entered into by the Vendor, Yancoal Sales and HVO Coal Sales Pty Ltd on completion of the Transaction. |
| HVO Joint Venture Agreement | the Joint Venture Agreement – Hunter Valley Operations dated 3 February 2016 between Coal & Allied Operations Pty Ltd, HVO Resources Pty Ltd and HV Operations Pty Ltd. |
| HVR | Hunter Valley Resources Pty Ltd (ABN 69 151 471 242). |
| Independent Expert | the independent expert appointed by the directors of Rio Tinto Limited to prepare the Independent Expert's Report. |
| Independent Expert's Report | the report dated 19 May 2017 and contained in the Rio Tinto Limited Circular from the Independent Expert to the directors of Rio Tinto Limited opining on the fairness and reasonableness of the Transaction to Rio Tinto Limited Shareholders. The report has been prepared solely for the purpose of complying with the ASX Listing Rules. |
| London Stock Exchange | London Stock Exchange plc. |
| Mitsubishi | Mitsubishi Development Pty Ltd (ACN 009 779 873). |
| Mitsubishi Group | Mitsubishi and each of its subsidiary companies. |
| Notice | the notice convening the Rio Tinto plc General Meeting at the end of this document. |
| NSW | the Australian state of New South Wales. |
| Proxy Form | the form of proxy accompanying this document for use by Rio Tinto plc Shareholders in relation to the Rio Tinto plc General Meeting. |
| Resolution | the resolution to be proposed at the Rio Tinto plc General Meeting and the Rio Tinto Limited General Meeting in connection with the Transaction. |
|---|---|
| Rio Tinto | Rio Tinto plc and Rio Tinto Limited or, where the context requires, the Rio Tinto Group. |
| Rio Tinto Group | Rio Tinto plc, Rio Tinto Limited and their respective subsidiaries and subsidiary undertakings and, where the context requires, their respective associated undertakings. |
| Rio Tinto Limited | Rio Tinto Limited (ABN 96 004 458 404), a company incorporated in Victoria, Australia whose registered office is at Level 33, 120 Collins Street, Melbourne, 3000, Victoria, Australia. |
| Rio Tinto Limited Circular | the Notice of Rio Tinto Limited General Meeting published on or about the date hereof containing details of the Transaction. |
| Rio Tinto Limited General Meeting | the general meeting of Rio Tinto Limited to be held at 11.00 a.m. (Australian Eastern Standard Time) on 29 June 2017, notice of which is set out at the end of the Rio Tinto Limited Circular. |
| Rio Tinto Limited Shareholders | holders of Rio Tinto Limited Shares. |
| Rio Tinto Limited Shares | the ordinary shares in the capital of Rio Tinto Limited. |
| Rio Tinto plc or Company | Rio Tinto plc, a company incorporated in England and Wales with company number 719885 whose registered office is at 6 St James's Square, London, SW1Y 4AD, United Kingdom. |
| Rio Tinto plc General Meeting | the general meeting of Rio Tinto plc to be held at 11.00 a.m. on 27 June 2017, notice of which is set out at the end of this document. |
| Rio Tinto plc Shareholders | holders of Rio Tinto plc Shares. |
| Rio Tinto plc Shares | the ordinary shares of 10 pence each in the capital of Rio Tinto plc. |
| Rio Tinto Shareholders | Rio Tinto plc Shareholders and Rio Tinto Limited Shareholders. |
| Rio Tinto Shares | Rio Tinto plc Shares and Rio Tinto Limited Shares. |
| Royalty Deeds | the four royalty deeds to be entered into by the Vendor and Coal & Allied Industries prior to completion of the Transaction. |
| Shining Prospect | Shining Prospect Pte. Ltd, being a Singapore-based entity owned by Chinalco. |
| SPA | the sale and purchase agreement between the Vendor, HVR and Yancoal dated 24 January 2017. |
| Transaction | the proposed disposal by the Vendor and HVR of Coal & Allied Industries to Yancoal pursuant to the SPA. |
| Transaction Documents | the SPA, the Royalty Deeds, the Transitional Services Agreement, the BLCP Novation Deed, the BLCP Back-to-Back Agreement, the Bee Creek Contract and related side letter, the Freight Transfer Deed and HVO Coal Supply Transfer Deed. |
| Transitional Services Agreement | the agreement to be entered into between Rio Tinto Services Limited and Coal & Allied Industries on completion of the Transaction. |
| UK Disclosure Guidance and Transparency Rules |
the disclosure guidance and transparency rules made by the FCA for the purposes of Part VI of the FSMA. |
|---|---|
| UK Listing Rules | the listing rules made by the FCA for the purposes of Part VI of the FSMA. |
| United Kingdom or UK | the United Kingdom of Great Britain and Northern Ireland. |
| Vendor | Australian Coal Holdings Pty. Limited (ABN 79 000 066 491). |
| Yancoal | Yancoal Australia Limited (ABN 82 111 859 119). |
| Yancoal Group | Yancoal, the subsidiaries and holding companies of Yancoal and each of the subsidiaries of any such holding company from time to time. |
| Yancoal Sales | Yancoal Australia Sales Pty Ltd (ABN 88 167 884 460). |
| Yankuang | Yankuang Group Company Limited. |
| Yanzhou | Yanzhou Coal Mining Company Limited. |
(Incorporated in England and Wales with registered number 719885)
NOTICE IS HEREBY GIVEN that a GENERAL MEETING of Rio Tinto plc (the "Company") will be held at 11.00 a.m. on 27 June 2017 at The Queen Elizabeth II Conference Centre, Broad Sanctuary, Westminster, London, SW1P 3EE, United Kingdom for the purpose of considering and, if thought fit, passing the following resolution (the "Resolution") which will be proposed as an ordinary resolution.
In accordance with Rio Tinto's dual listed companies' structure, the Resolution will be voted on by Rio Tinto plc Shareholders and Rio Tinto Limited Shareholders as a joint electorate.
THAT the Transaction, on the terms and subject to the conditions set out in the SPA and the other Transaction Documents (as each term is defined in the circular to Rio Tinto plc Shareholders dated 19 May 2017), be and is hereby approved and the Directors (or a duly authorised committee of the Directors) be and are hereby authorised to waive, amend, vary or extend any of the terms and conditions of the Transaction Documents, provided that any such waivers, amendments, variations or extensions are not of a material nature, and to do all things as they may consider to be necessary or desirable to complete, implement and give effect to, or otherwise in connection with, the Transaction and any matters incidental to the Transaction.
Dated: 19 May 2017
By order of the Board Steve Allen Company Secretary
Registered in England and Wales with No: 719885.
Registered office: 6 St James's Square, London, SW1Y 4AD, United Kingdom
under which it is executed (or a notarially certified copy of any such authority) must reach the transfer office of the Company at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY, United Kingdom by no later than 11.00 a.m. on 23 June 2017 or, if the Rio Tinto plc General Meeting is adjourned, by no later than 48 hours (excluding any part of a day that is not a working day) before the time fixed for the adjourned meeting or, if the Company gives notice of the adjourned meeting, at the time specified in that notice.
9. The total number of issued ordinary shares in the Company on 17 May 2017, which is the latest practicable date before the publication of this document, is 1,381,905,851.
10. The Resolution to be voted upon at the Rio Tinto plc General Meeting is a joint decision and will be dealt with under the joint electorate procedure. For an explanation of this procedure, see below under "Additional Notes: Summary of voting arrangements for Rio Tinto Shareholders".
The DLC Sharing Agreement (the agreement relating to the regulation of the relationship between Rio Tinto plc and Rio Tinto Limited following the dual listed companies merger) provides for the public shareholders of Rio Tinto plc and Rio Tinto Limited to vote as a joint electorate on all matters which affect shareholders of both companies in similar ways. These are referred to as "Joint Decisions". Joint Decisions are voted on a poll.
To facilitate the joint voting arrangements, each company has entered into shareholder voting agreements. Each company has issued a special voting share to a special purpose company held in trust by a common trustee.
Rio Tinto plc has issued its special voting share ("Rio Tinto plc Special Voting Share") to RTL Shareholder SVC and Rio Tinto Limited has issued its special voting share ("Rio Tinto Limited Special Voting Share") to RTP Shareholder SVC. The total number of votes cast on Joint Decisions by the public shareholders of one company are voted at the parallel meeting of the other company. The role of these special purpose companies in achieving this is described below.
At a Rio Tinto plc Shareholders' meeting at which a Joint Decision will be considered, each Rio Tinto plc Share will carry one vote and the holder of the Rio Tinto plc Special Voting Share will have one vote for each vote cast by the public shareholders of Rio Tinto Limited. The holder of the Rio Tinto plc Special Voting Share is required to vote strictly, and only, in accordance with the votes cast by public shareholders for and against the equivalent resolution at the parallel Rio Tinto Limited Shareholders' meeting.
The holders of Rio Tinto Limited ordinary shares do not actually hold any voting shares in Rio Tinto plc by virtue of their holding in Rio Tinto Limited and cannot enforce the voting arrangements relating to the Rio Tinto plc Special Voting Share.
At a Rio Tinto Limited Shareholders' meeting at which a Joint Decision will be considered, each Rio Tinto Limited Share will carry one vote and the holder of the Rio Tinto Limited Special Voting Share will carry one vote for each vote cast by the public shareholders of Rio Tinto plc in their parallel meeting. The holder of the Rio Tinto Limited Special Voting Share is required to vote strictly, and only, in accordance with the votes cast for and against the equivalent resolution at the parallel Rio Tinto plc Shareholders' meeting.
The holders of Rio Tinto plc ordinary shares do not actually hold any voting shares in Rio Tinto Limited by virtue of their holding in Rio Tinto plc and cannot enforce the voting arrangements relating to the Rio Tinto Limited Special Voting Share.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.