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BHP Billiton: Investors to Vote on Demerger Plan in May 2015

Australia-based BHP Billiton is expected to hold a vote for investors in May of next year to share their say on the companys future demerger plan.The ge...

|Nov 24|magazine6 min read

Australia-based BHP Billiton is expected to hold a vote for investors in May of next year to share their say on the company’s future demerger plan.

The general meeting, which is expected to be held next year in May, will allow shareholders the opportunity to voice their opinions and thoughts on BHP’s plan to split the company into ‘core’ and ‘non-core’ assets. The split will provide BHP to retain its ‘four pillars’ of iron ore, coal, petroleum and copper, with potash as a possible fifth pillar.

According to chief executive Andrew Mackenzie, additional commodities such as silver and Illawarra Coal will spin off into the new company.

"The new company will be the world's largest producer of manganese ore, will own the world's largest producing silver mine and be a substantial producer of alumina, aluminium, nickel and coal.”

Despite slumping iron ore prices, BHP confirmed its iron ore division was still one of its most profitable businesses. The company recently came under fire from West Australian Premier Colin Barnett, who questioned their expansion strategies and accused BHP of “seemingly acting in concert” to keep iron ore prices at extremely low levels.

Management reshuffling

According to Business Review Australia, BHP plans to reshuffle management within the organization, changing roles of many of its highest-ranking executives.

“Mike Henry, former head of marketing, was announced as the president of the company’s coal assets; he takes over for Dean Valla Valle, who practically swapped roles with Henry to become marketing, health, safety and environment boss. Daniel Malchuk, former aluminium boss, is the new president of copper. Peter Beaven, previous copper president is on track to become the CFO, with former CFO Graham Kerr moving to run the demerged entity next year.”

BHP also announced plans to cut costs and accelerate a reduction in investment spending to its core assets. The company’s capital spending will be cut by $1 billion in the 2016 financial year, freeing up more cash for shareholder returns.