Rio stung with $625m costs for rights issue

MINING giant Rio Tinto now faces $625m (£382m) in costs over its $15.2bn rights issue, which came after its bid to raise money from Chinese state-owned mining group Chinalco collapsed.
 

Investment banking giants including  Morgan Stanley will walk away from the deal $430m better off, after Rio already had to pay a $195m break fee to Chinalco. 
 

And it is now thought a further $800m of costs are owed to investment banks, relating to work done on the Chinalco deal. 
 

The costs, which could add up to $1.42bn, represent a signficant percentage of the $18bn debt Rio is trying to pay off. 
 

The firm launches the fully underwritten 12-for-40 rights issue today.