[miningmx.com] – THE board of BHP Billiton is due to convene next week to consider the demerger of a selection of its assets.
The group said in a statement today that it continued to study structural alternatives and that “a demerger of a selection of assets is our preferred option”.
“The board expects to consider this, and other matters, when it reconvenes next week. If any material decisions are made, they will be announced immediately,” it said.
“With Billiton identifying iron ore, copper, coal and petroleum (plus potash) as the key divisions, a spin-off is expected to nickel, manganese and aluminium,” said Investec Securities in a note.
These assets accounted for 14% revenue in the group’s 2013 financial year, and less than 1% of operating income, affirming its status as non-core, Investec said. BHP said its iron ore, copper, coal, and petroleum assets gave it sufficient diversity.
“By increasing our focus on these four pillars, with potash as a potential fifth, we will be able to more quickly improve the productivity and performance of our largest businesses,” it said.
“Clearly BHP are looking to do a big shake up, and this could be a wholesale carving off of whole business divisions into a new entity – aluminium and nickel top of the list,” said Numis Securities in a note.
“This would be the natural path after failing to find a buyer for its Nickel West assets recently, demonstrating that quick and dirty asset sales are tricky in this market – especially for highly-priced assets,” it said.
