Investing.com -- Rio Tinto (NYSE: RIO ) Group has abandoned its plans to raise up to $5 billion through a share sale due to resistance from investors, according to Bloomberg, citing individuals familiar with the situation. The mining giant had brought up the idea of an equity offering in recent discussions with investors following its results announcement. The raised funds could have been utilized to finance the company’s $6.7 billion acquisition of Arcadium Lithium Plc and to rebalance its shareholding between UK and Australian investors.
Last month, CEO Jakob Stausholm mentioned the potential of raising funds to rebalance the company’s share register, but confirmed no decision had been made. The decision to put the idea on hold came after significant resistance from investors in recent meetings, particularly as the company did not view the offering as a financial necessity.
The proposed raise could have also increased liquidity among its Australian shareholders. The company’s share register is heavily weighted towards London, with approximately three-quarters of its stock there.
The company has been urged by an activist investor to consolidate its dual listing into an Australian-domiciled holding company. Rio has dismissed this suggestion, arguing it would cost billions and offer no benefits. Nevertheless, investors will have the opportunity to vote on the proposal at the company’s upcoming annual shareholder meetings in the UK and Australia.
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