TRQ - Hedge fund issues legal threat against Rio Tinto in Mongolia mine dispute

Rio Tinto (RIO) faces a new front in the escalating dispute over how to finance the $6.8B underground expansion of the Oyu Tolgoi mine in Mongolia, as U.S. hedge fund Pentwater Capital threatens to file an "oppression" order unless Rio allows the Turquoise Hill Resources (TRQ) subsidiary to take on more debt to fund the project.Pentwater's warning comes days after London-based Odey Asset Management also called on Rio to change the way it funded the project.Rio has said it will not allow Turquoise Hill to take on more than $500M in additional debt, telling the 50.8%-owned subsidiary to plug a funding gap of up to $3B by reprofiling loans and raising equity.The move has alarmed minority Turquoise Hill shareholders including Pentwater, which owns nearly 10% of the company and fears being diluted if Turquoise is not allowed to issue more debt or raise cash by selling the rights to future

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Hedge fund issues legal threat against Rio Tinto in Mongolia mine dispute