BHP Billiton is considering a potential listing on the London Stock Exchange for NewCo, its spinoff company that will be created through a demerger of the company’s South African aluminium, coal, manganese, nickel and silver assets.
This comes after “extensive” discussions with UK-based shareholders, would not be able to otherwise invest because they are not mandated to buy companies in those regions.
BHP Billiton said that it is “now assessing a potential Standard listing in London for the new company,” despite the fact that the company initially intended to list NewCo in Australia and South Africa only and that a London listing would not be pursued because of the cost and complexity involved.
NewCo’s aluminium, coal, manganese, nickel and silver assets will be worth an estimated $16 billion, and the new company will be headquartered in Perth. The demerger by BHP Billiton is expected to be completed by the middle of the 2015 calendar year.
“We have been pleased by the support for the demerger and the level of interest investors have shown in the new company,” BHP Billiton said.
The assets selected for the new company include BHP Billiton’s aluminium and manganese businesses and the Cerro Matoso Nickel, Energy Coal South Africa, Illawarra Metallurgical Coal and Cannington Silver-Lead-Zinc mines.
Following the demerger, BHP Billiton will be able to better focus on its iron ore, copper, coal, petroleum and potash operations, allowing it to boost shareholder returns. In August, the company said it would cut costs and improve the productivity of its remaining businesses.
BHP Billiton Chief Financial Officer Graham Kerr will become chief executive while Head of Investor Relations Brendan Harris will become chief financial officer. Both will be based in Perth, Australia. David Crawford will be its chairman, stepping down from the board of BHP Billiton.
“Today, BHP Billiton owns 41 assets worldwide. The proposed demerger will be a significant step towards focusing the portfolio on the 19 assets which generated 96 per cent of the group’s underlying EBIT in the 2014 financial year,” said the company in a statement.
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