BHP Billiton plans to spin-off some of its assets
into a new $14bn (£8.4bn) metals and mining company in order to simplify its
operations.
The world's biggest mining firm also posted a rise in annual profits of
23% to $14bn, missing analysts' forecasts.
BHP chief financial officer Graham Kerr will head the new company,
which will contain the aluminium, coal, manganese, nickel and silver
operations.
The new entity, called NewCo for now, will list on Australia's stock
market.
It will also have a secondary listing in South Africa. However, the
proposal still needs to go through a shareholder vote and be approved by
regulators.
BHP's London-listed shares fell nearly 4% following the announcements.
BHP said the demerger will allow it to focus on core businesses in iron
ore, copper, coal, petroleum and potash production.
"By concentrating on what we do best, the development and
operation of major basins, we can improve our productivity further, faster and
with greater certainty," BHP chief executive Andrew Mackenzie said in
a statement.
Corporate
restructuring
Analysts said they had been expecting the spin-off, which is
expected to be completed in the first half of 2015.
"Cash from an asset sale is no longer critical to the
group," David Lennox, a resource analyst from Fat Prophets in Sydney said.
"Removing underperforming businesses has become critical
in the battle to generate shareholder returns and allocate capital."
BHP ranks among the world's largest producers of major
commodities which include aluminium, coal, copper as well as silver and
uranium. The company also holds substantial interests in oil and gas.
Last week, the company said in
a statement that it is looking into ways to further simplify its corporate
structure, to "retain the benefits of diversification, generate stronger
growth in cash flow and a superior return on investment".
BHP's global headquarters is located in Melbourne,
Australia. The company's shares are listed on two stock exchanges - in London
and Australia.
The company also has a secondary listing on the Johannesburg
stock exchange and two American Depositary Receipt listings on the New York
Stock Exchange.
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