n connection with these matters, Alcoa and Chinalco have also entered
into an agreement by which Chinalco will redeem the convertible note
issued by Shining Prospect Pte. Ltd., a wholly-owned subsidiary of
Chinalco, to Alcoa last year for the funding of Shining Prospect’s
purchase of ordinary shares in the London-listed Rio Tinto plc. The
original principal amount of the note would have been payable on
February 1, 2011. Under the terms of the agreement entered into today,
the note will be redeemed by Chinalco for a total of US$1.021 billion
payable to Alcoa in three installments (over a period ending on July 31,
2009), and Alcoa’s lien on and indirect interest in Rio Tinto shares
held by Shining Prospect will end. The total redemption amount
represents the discounted net present value of the principal amount of
the note (and the total redemption amount will be further discounted if
any installment payment is made earlier than contemplated by the
agreement). The agreement also provides that Alcoa's pro rata portion of
the dividends paid by Rio Tinto to date since the issuance of the
note as and when recovered by Shining Prospect will be paid to Alcoa.
