Executives at Rio face wrath of investors

Rio Tinto executives faced disgruntled shareholders yesterday with conciliatory attention as they indicated that compromises were not out of the question on the terms of the miner's fund-raising deal with Chinalco.

Rio had redoubled efforts to listen to shareholders, said Paul Skinner and Tom Albanese, chairman and chief executive respectively, during three hours that included shareholders accusing Rio of “selling off part of the company silver”, being “totally unreasonable to agree to forget investors' pre-emption rights” and involving the company in a “strategic mire”.

Rio's shareholder base remains divided two months after the company proposed to raise $19.5bn from Chinalco.

It will receive part of those funds by selling asset stakes to Chinalco, and another part by offering Chinalco a bond that the Chinese group will later convert to shares, enhancing its position as Rio's largest shareholder.

A point of contention for many UK shareholders remains their exclusion from the bond, which not only converts to equity but pays a 9 per cent coupon.

Asked if there was room for compromise with shareholders on the bond offer, Mr Skinner said it was too early to speculate. But he added: “We hope to be in a position to offer something that pleases everyone.”

Any changes to the deal terms would require assent from Chinalco. A person close to its thinking has indicated that the Chinese miner is more flexible on bond terms being altered than asset stakes being changed.

Rio executives implied there would be a shareholder listening campaign in the final months before the Australian government rules on the Chinalco deal this summer, a precursor to Rio shareholders voting to approve or reject it in a special meeting.

A softened tone about the deal is new to Mr Skinner, who will soon leave the chairmanship. The commodities boom made Rio very profitable and inspired it to pay $38bn for alumin