BHP Billiton Plc’ share price up, considers a spinoff of some assets to focus on core operations

Written by Miroslav Marinov

Miroslav Marinov, a financial news editor at TradingPedia, is engaged with observing and reporting on the tendencies in the Foreign Exchange Market, as currently his focus is set on the major currencies of eight developed nations worldwide.

, | Updated: October 30, 2024

The largest mining company by market value in the world – BHP Billiton Plc made an official statement today and revealed that it may announce a spinoff of some of its assets next week. The assets in question were purchased by the company three years ago and currently amount to about
12 billion dollars.

BHP Billiton Plc said that its directors will consider a new structure in order to make the company more focused on its four major products at their meeting next week. Their decisions will be announced immediately. This is not the first time when the U.K.based mining company casts aside unwanted assets. In January 2012 BHP Billiton sold operations estimated to 5.2 billion dollars after a decision to make its portfolio simpler.

The company did not disclose which of its assets could be sold, but it revealed that it intends to focus on its four main operations, which include iron ore, copper, coal and petroleum production. BHP Billiton Plc also has nickel, manganese and aluminium operations, which according to some analysts are to be spun off into separately listed entities.

BHP Billtion Plc said in its statement of Friday, which was cited by the Financial Times: “We believe that a portfolio focused on our major iron ore, copper, coal and petroleum assets would retain the benefits of diversification, generate stronger growth in cash flow and a superior return on investment.” The U.K.based company also added: “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.”

The decision of the company to eventually sell some of its assets was not a surprise, especially after it hinted of such a sale in April 2014, saying that such a step would be part of its restructuring strategy. In his speech in May 2014, the Chief Executive Officer of BHP Billiton Mr. Andrew Mackenzie shared that making the company more focused on its major projects, which generated about 85% of the companys sales in 2013, is considered to be beneficial for increasing the cash flow, production growth and improving the return on investment.

BHP Billiton Plc added 2.62% to trade at 2078.5 pence per share by 9:00 GMT, marking a one year change of +5.21%.

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