Leng Resigns from Rio's Board

Submitted by Share Trading on 9 February, 2009 - 17:26

Rio Tinto (RIO) announces that, Jim Leng who was selected as the company's new chairman had resigned from the board and would not take up the position. At the request of the Boards, Rio Tinto’s current Chairman, Paul Skinner, has agreed to remain as Chairman until mid 2009, by which time it is anticipated that a successor will be appointed.

Rio has been trying to sell assets and has cut jobs and projects to meet a target of reducing debt by $10 billion this year, but the sales have taken longer than expected amid the global economic slowdown. The group’s response to BHP Billiton’s overtures last year was the initial cause of the tensions within the Rio boardroom. Rio has been under pressure to cut debt after bigger rival BHP Billiton scrapped a hostile takeover bid last November.

This week Rio will announce its results for the year to December. The result is expected to include massive write-downs on Alcan and other assets. With more than $US40 billion of debt as a result of debt-funded Alcan acquisition, Rio is in a parlous position. It has acknowledged that it has been considering its strategy for dealing with $20 billion of debt that has to be refinanced over the next two years, including $8.9 billion that matures in October.

Current Rio Tinto chairman Paul Skinner at the time said he would step down earlier than planned, after the group's Australian annual meeting in April, the company said. He will now remain in the post until mid-2009 to allow time to appoint a successor. Leng was also chief executive officer of chemicals maker Laporte Plc from 1995 to 2001 when it agreed to be acquired by German company Degussa-Huels AG. Rio shares rose as much as 7.6 percent amid speculation it may soon sell a stake to Aluminum Corp. of China to reduce its $38.9 billion debt.