1st Apr 2014 07:15
LONDON (Alliance News) - BHP Billiton PLC Tuesday said it is mulling an overhaul of its operating portfolio to focus on up to five commodities, after media reports that the company is considering a AUD20 billion demerger of non-core assets.
The global mining company is being advised on options, including the spin-off of aluminium, manganese, thermal coal and nickel assets, bringing the company up to AUD20 billion, The Australian newspaper reported Tuesday.
BHP Billiton noted the press speculation in a statement issued Tuesday and said simplification of its portfolio is a priority, believing that a portfolio focused on its major iron ore, copper, coal and petroleum assets would retain the benefits of diversification, generate stronger growth in free cash flow and a superior return on investment.
The company said it could envisage potash as a potential fifth asset, which it said would improve the productivity and performance of its largest businesses.
BHP Billiton said it continues to actively study the next phase of simplification, including structural options, but that any course of action must remain subject to a detailed review and assessment of alternatives.
The Australian Financial Review said that the company had appointed Goldman Sachs to advise the company on options and noted that individual asset sales to trade buyers remains the most likely outcome if the divestment programme goes ahead.
In the last two years, BHP has announced or completed a range of divestments across the world in multiple commodities including the sale of its diamonds business last Spring.
BHP Billiton shares are up 1.7% to 1,875.38 pence, putting it second among the FTSE 100 risers in early trading Tuesday
http://www.theaustralian.com.au/business/bhp-billiton-mulls-20-billion-demerger-plan/story-e6frg8zx-1226871032272#mm-premium
http://www.afr.com/p/business/companies/bhp_billiton_mulls_bn_demerger_K7m1MgiUIpFmJM1iJV4ozM
By Tom McIvor; [email protected]; @TomMcIvor1
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