BHP Billiton Considering Significant Asset Sales

The Wall Street Journal reported that BHP Billiton Ltd. (ASX:BHP) signaled it may pursue a new wave of asset sales in order to focus on commodities such as iron ore and petroleum, which at present make up the lion’s share of its earnings.

As quoted in the publication:

The world’s largest mining company on Tuesday said simplifying its portfolio was a priority for management, following a drop in commodity prices. The remarks followed a news report that BHP executives are considering spinning off some unwanted assets in a market listing that could potentially be valued at around 20 billion Australian dollars (US$19 billion).

Pengana Capital portfolio manager Tim Schroeders told the Wall Street Journal:

It’s no secret they have been looking to reshape the business–the sticking point has really been achieving a suitable price for those assets.

If they go down that path it will depend on gearing in the new company, given earnings will be stretched to say the least.

Click here to read the full Wall Street Journal article.