RPT-IPO VIEW-Rio Tinto's U.S. coal unit could face tepid demand

Sun Nov 15, 2009 12:00pm GMT
[-] Text [+]

(Repeats story filed Nov. 13, with no change to headline or text)

*Rio Tinto to get about $520 mln from Cloud Peak IPO

*Sales at coal producer Cloud Peak rise, but demand wobbly

*Cloud Peak valuation is high compared to peers

By Phil Wahba and Clare Baldwin

NEW YORK, Nov 13 (Reuters) - Anglo-Australian miner Rio Tinto Plc (RIO.L: Quote, Profile, Research)(RIO.AX: Quote, Profile, Research) is hoping to raise $520 million by spinning off its U.S. coal business, but analysts cautioned that demand for the offering could be tepid.

The IPO is priced at a premium compared with competitors.

And Cloud Peak plans to issue $600 million in notes at the same time as the IPO, which will bring its total debt load to $760 million.

On top of that, global demand for coal has plummeted and the outlook is cloudy.  Continued...

 
RIO.L
Last:
Change:
Up/Down:
 
by Name by Symbol