Australian resources giant BHP Billiton is planning a reported $14 billion spin-off of marginal assets in order to focus on its four core businesses, including petroleum.
The proposed move by BHP to demerge its unwanted aluminium, manganese and nickel assets, which account for only a small proporting of its earnings, would “generate stronger growth in cash flow and a superior return on investment”, the Melbourne-based company said in a bourse statement on Friday.
The company, led by chief executive Andrew Mackenzie, said it was looking to boost productivity by further simplifying its portfolio to focus on its four main pillars of iron ore, copper, coal and petroleum, with potash as a possible fifth.
BHP stated its board had looked at a range of structural alternatives and that “a demerger of a selection of assets is our preferred option”, with one report putting the value of the proposed spin-off at $14 billion.
The company has an extensive global upstream portfolio that includes operations in the Eagle Ford, Permian basin and Haynesville shale plays in the US, offshore assets in the Gulf of Mexico, the UK, Trinidad and Pakistan, as well as oil and gas holdings in its native Australia.