Arab Today, arab today bhp shares lower after demerger approved
Last Updated : GMT 15:39:54
Arab Today, arab today
Arab Today, arab today

BHP shares lower after demerger approved

Arab Today, arab today

Arab Today, arab today BHP shares lower after demerger approved

Anglo-Australian mining giant BHP Billiton's Mount Newman iron ore mine
Sydney - AFP

Shares in the world's biggest miner BHP Billiton drifted lower on Thursday after stockholders approved its proposed spin-off of non-core assets into another company, South32.

Soon after the open, BHP was down 0.50 percent at Aus$32.19 in a weak overall market.

In meetings late Wednesday in Perth and London, 98.05 percent of shareholders in the dual-listed company backed a plan for BHP to focus on its most profitable core long-life operations -- iron ore, copper, petroleum, coal and potash.

This will allow South32 to operate assets including aluminium, coal, nickel, manganese, silver, lead and zinc, with most of its mines in the southern hemisphere.

"The demerger of South32 simplifies BHP Billiton's portfolio while retaining the benefits of scale and diversification," said chairman Jac Nasser.

"We believe that the demerger will create two successful companies in BHP Billiton and South32.

"The demerger of South32 is a major step forward in the evolution of BHP Billiton and our board believes it will create long-term value for our shareholders," he added.

BHP has previously said the new entity would start life with only modest net debt, allowing it room to expand and open additional mines.

It will be listed in Sydney, London, and Johannesburg and is expected to start trading on May 18. Shareholders will receive one South32 share for each BHP share they hold.

The total one-off costs of implementing the demerger are estimated to be about US$730 million. But BHP expects it will bring cost savings of some US$100 million a year.

 

 

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