BHP To Concentrate More On Its Core BusinessDaniel McCarthy (Author) Published Date : Aug 19, 2014 13:27 IST
To concentrate more on its profitable business BHP Billiton the world s largest mining company is planning to twist its business cost of $16 billion where most of them have been taken during the merger in 2001.
However it disappointed the share holders as they have been hoping to get $ 5 billion as BHP s share price in London stock market fell 4.5 percent.
According to the Chief Executive of the firm Andrew Mackenzie the company is expecting to stand on its four pillars which are iron, ore, copper, coal and petroleum while he also hopes that potash will be its fifth pillar to gain profits for the company.
The mentioned assets of the company do generates its 96 percent of profits for BHP in the current 2014 financial year.
The chief executive of the company said, A demerger is a logical next step for other high quality assets also in our portfolio that don't have a scale of those in our major business.
According to David Radclyffe who is an analyst with CLSA in Sydney informed that, It's probably a better asset mix than we thought it would be beforehand. BHP has added Cerro Matoso, which is a better nickel asset than its Nickel West division, and Illawara Coal, said David Radclyffe, an analyst with CLSA in Sydney.
Christopher Moore, portfolio manager of Fidelity Global Industrials Fund, which owns shares in BHP Billiton, said he hoped more focused management and investment would make the hived-off assets perform better.
One of the share holders in BHP, Fidelity Global Industrials Fund s portfolio manager Christopher Moore informed that BHP should be focusing more on its profit making business and by this decision it will help the firm to grow.
Shareholders could benefit from a potential acquisition of all of them by a larger mining company, or part of them, to crystallize value. said Moore.
BHP To Concentrate More On Its Core Business