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Anglo disposes of its Billiton interes
Anglo disposed of its 7.1% interest in Billiton via a private placing executed by Goldman Sachs International at a price of 317 pence per share during Apr 01. Billiton's share price fell more than 5% to end at R37.80 per share following rumours of the sale on 26 Apr 01. A resources analyst at Goldman Sachs said that Anglo's exit had "removed one of the greatest material risks to the merger (between BHP and Billiton)"
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Billiton wins support of analysts
Tours of some of the groups key sites in Mozambique, Western Australia and South Africa by analysts went a long way to allaying fears about the quality of assets that BHP was investing in. One of the projects to be fast tracked by the merged entity would be expansion of the Mozal operation. Given the US crisis, cheap power supplies in the region boded well for a 500 000 ton per annum smelter.
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Billiton gains from US power cuts
The power crisis in the US has resulted in the cessation of aluminium smelting, affecting, amongst others, the world's largest aluminium producer in the North West Pacific area. Sources said that if the aluminium companies did not agree to a reduction in power demand by Jun 01, wholesale rate increases of 250% could be expected after 1 Oct 01. Billiton's share price rose to R39.9 on 12 Apr 01 following news of restricted production from the US. SCMB Asset Management said in a review of prices that aluminium should trade in the $1 550 - $1 650 as production from the 10 primary aluminium smelters in the North West Pacific slowed.
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Billiton's Mozal to double production
Billiton’s resources group Mozal said that permission had been obtained from the Mozambican government to double production to 500 000 tons per annum at its aluminium plant. A decision on the financing of 60% or $900m of the project was awaited from major lenders which was needed for the construction of a second refinery plant. Once approved, final commissioning would be just over two years from commencement for the company which is the country's largest industrial project. Other shareholders are Mitsubishi, the IDC and Mozambican government.
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Speculation that Billiton in seller of CVRD
A brazilian newspaper said that Billiton might be the seller of the stake in Compania Vale do Rio Doce (CVRD). The stake in CVRD brought Billiton exposure to the iron ore industry but it is conjecture that since its merger with Australia's BHP (a major iron ore producer) that the stake is surplus to requirements.
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Billiton seeks support of Australian analysts
Billiton executives are on an Australian roadshow presenting group's assets and management to fund managers and analysts ahead of its proposed merger with BHP. The Sydney fund managers appeared satisfied with capital investment and operational issues.
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| Closing price data source: JSE Ltd. All other statistics calculated by ProfileData. |
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