BHP BILLITON LAUNCHES DEMERGER OF BHP STEEL13 May 2002
DATE       13 MAY 2002                                                          
NUMBER     29/02                                                                
BHP Billiton today announced that it has lodged documents relating to the       
demerger of BHP Steel Limited (BHP Steel) from BHP Billiton Limited and the     
related bonus issue of shares to BHP Billiton Plc shareholders with the         
Australian Securities and Investment Commission (ASIC) and other regulators.    
Copies of these documents will be available on the Group`s Internet site at     
www.bhpbilliton.com                                                             
BHP Billiton Chairman Don Argus said: "Today is a very significant step         
towards the planned public listing of BHP Steel in July this year.  Since we    
announced our intention to separate and publicly list our steel flat and        
coated products business more than 12 months ago, there has been solid          
support for the listing from all of BHP Steel`s stakeholders.                   
"There is recognition that the listing of BHP Steel will maximise the future    
prospects of that business by creating a stand-alone company focused on         
maintaining and enhancing its strong market reputation.  Significantly, BHP     
Steel will be master of its own destiny in terms of capital management and      
that will prove a tremendous positive for the business going forward."          
Mr Argus said: "BHP Steel will be able to pursue and capture market             
opportunities and ensure its long-term competitiveness in a way that would      
not have been possible if it had remained part of BHP Billiton.  That has       
proven true of our former long steel products business, now OneSteel, which     
shortly after being spun-out from BHP went on to participate in a major         
industry consolidation transaction."                                            
Eligible BHP Billiton Limited shareholders will receive one BHP Steel share     
for every five BHP Billiton Limited shares held.  BHP Billiton Plc              
shareholders will not receive BHP Steel shares. Instead, to ensure equality     
in the economic treatment of BHP Billiton Plc shareholders, such                
shareholders will receive a bonus issue of BHP Billiton Plc shares to           
reflect the market value of the BHP Steel shares being distributed to BHP       
Billiton Limited shareholders.                                                  
The demerger aims to maximise the combined value of BHP Steel and the BHP       
Billiton Group. Importantly, the process provides eligible BHP Billiton         
Limited shareholders with the opportunity to retain their BHP Steel shares,     
to acquire additional shares prior to the public listing of BHP Steel or to     
sell part or all of their entitlement into a dedicated Sale Facility.           
Mr Argus said: "Upon listing, BHP Steel will be a well-capitalised,             
independent company and will hold an important place within the Australian      
investment market.  It will have an experienced and energetic Board and         
management team dedicated to maximising value for shareholders, many of whom    
will also continue to be BHP Billiton Limited shareholders."                    
Details of the demerger transaction mechanics are attached in the following     
appendices.                                                                     
This announcement does not contain or constitute an offer or invitation to      
purchase or subscribe for any securities of BHP Billiton Limited, BHP           
Billiton Plc or BHP Steel in any jurisdiction, including the United States      
and should not be relied on in connection with any decision to purchase or      
subscribe for any such securities.                                              
BHP Steel shares have not been and will not be registered under the US          
Securities Act of 1933, and may not be offered or sold in the United States     
absent registration or an applicable exemption from the registration            
requirements of the US Securities Act.                                          
Offers of shares in BHP Steel Limited are to be accompanied by a copy of the    
Retail Prospectus, the Shareholder Prospectus or the Institutional Offer        
Memorandum.  Anybody wishing to acquire shares in BHP Steel will need to        
complete an application form or buy form (in the case of BHP Billiton           
Limited Shareholders) that will be in or will accompany the Retail              
Prospectus or the Shareholder Prospectus.                                       
This announcement has been issued by BHP Billiton and the contents have been    
approved solely for the purposes of section 21 of the Financial Services and    
Markets Act 2000 by ABN AMRO Corporate Finance Limited and Credit Suisse        
First Boston (Europe) Limited, which are regulated in the United Kingdom by     
the Financial Services Authority. ABN AMRO Corporate Finance Limited and        
Credit Suisse First Boston (Europe) Limited are acting exclusively for BHP      
Billiton and for no one else in connection with the demerger of BHP Steel       
and will not be responsible to anyone other than BHP Billiton for providing     
the protections afforded to clients of ABN AMRO Corporate Finance Limited       
and Credit Suisse First Boston (Europe) Limited, or for providing advice in     
relation to the demerger of BHP Steel.                                          
For further information, please contact:                                        
Australia                      United Kingdom/South Africa                      
Dr. Robert Porter, Investor    Mark Lidiard, Investor & Media                   
and Media Relations            Relations                                        
Tel: + 61 3 9609 3540          Tel: +44 20 7747 3956                            
Mobile: +61 419 587 456        email:                                           
email:                         Mark.Lidiard@bhpbilliton.com                     
Robert.Porter@bhpbilliton.com                                                   
United States                  Ariane Gentil, Manager                           
Francis McAllister, Investor   Communications                                   
Relations                      Tel: +44 20 7747 3977                            
Tel: +1 713 961 8625 Mobile:   Mobile: + 44 7881 518 715                        
+1 713 480 3699                email:                                           
email:                         Ariane.Gentil@bhpbilliton.com                    
Francis.R.McAllister@bhpbilli                                                   
ton.com                                                                         
Appendix A                                                                      
Capital Reduction, Scheme of Arrangement and Bonus Issue of BHP Billiton Plc    
Shares                                                                          
As announced on 24 April 2002, the demerger will be implemented by way of a     
capital reduction and distribution of 94% of BHP Steel shares.  Under the       
capital reduction and scheme of arrangement (the "Scheme"):                     
the share capital of BHP Billiton Limited will be reduced by $0.69 for each     
BHP Billiton Limited share on issue at the record date, expected to be          
Friday, 5 July 2002; and                                                        
eligible BHP Billiton Limited shareholders will be entitled to receive one      
BHP Steel share for every five BHP Billiton Limited shares held.                
The return of capital by BHP Billiton Limited from its share capital account    
to BHP Billiton Limited shareholders will not be treated (in whole or part)     
as a dividend for Australian taxation purposes.  In this regard, BHP            
Billiton Limited has sought and obtained a class ruling from the Australian     
Taxation Office.                                                                
BHP Billiton will offer for sale the remaining 6% of BHP Steel shares on        
issue under a sale facility (see below).                                        
BHP Billiton Plc Shareholders will not receive BHP Steel shares.  Instead,      
to ensure equality in the economic treatment of BHP Billiton Plc                
shareholders, such shareholders will receive a bonus issue of BHP Billiton      
Plc Shares to reflect the market value of the BHP Steel shares being            
distributed to BHP Billiton Limited Shareholders.  The total number of          
shares to be issued under the bonus issue will be determined using the          
formula contained in Appendix B.  The bonus issue is expected to be made on     
Monday, 22 July 2002 to holders of BHP Billiton Plc shares on the register      
as at Friday, 19 July 2002 (except for shareholders registered in the South     
African section of the register where the bonus shares are expected to be       
issued on 29 July 2002 to holders on the register as at 26 July 2002).          
Further details relating to the capital reduction, Scheme and bonus issue of    
BHP Billiton Plc shares are contained in the Scheme Booklet that is being       
sent to BHP Billiton Limited shareholders and the BHP Billiton Plc Circular     
that is being sent to BHP Billiton Plc shareholders along with a copy of the    
Scheme Booklet.                                                                 
Approval Process and Timetable                                                  
On Friday, 10 May 2002 the Federal Court of Australia ordered the convening     
of shareholder meetings of BHP Billiton Limited to approve the Scheme of        
Arrangement.                                                                    
The Scheme and the bonus issue of BHP Billiton Plc shares to BHP Billiton       
Plc shareholders are subject to the approval of both sets of BHP Billiton       
shareholders.  An Extraordinary General Meeting of BHP Billiton Plc             
shareholders will take place at 9.30 a.m. (London time) and a General           
Meeting of BHP Billiton Limited shareholders will take place at 6.30 p.m.       
(Melbourne time), both on Wednesday, 26 June 2002.  Further details are         
contained in the Notices of Meeting included within the BHP Billiton Plc        
Circular and BHP Billiton Limited Scheme Booklet respectively.  Documents       
will be despatched to shareholders on or before 24 May 2002.                    
The Scheme is also subject to the approval of the Federal Court of Australia    
at a court hearing due to be held on Monday, 1 July 2002.  The demerger is      
dependent on all of the above approvals being obtained.                         
BHP Billiton Limited will trade ex the entitlement to BHP Steel shares on 2     
July 2002. On this date, the value of each BHP Billiton Limited share would     
be expected to fall, reflecting the separate value of BHP Steel shares.         
Sale Facility and Offer of BHP Steel shares                                     
Sale Facility                                                                   
The Sale Facility is being offered to eligible BHP Billiton Limited             
shareholders who wish to offer to sell, prior to the listing of BHP Steel on    
ASX, some or all of the BHP Steel shares to which they are entitled under       
the Scheme.  The BHP Steel shares attributable to Ineligible Overseas           
Shareholders will also be offered for sale under the Sale Facility and the      
proceeds of sale will be remitted to such Ineligible Overseas Shareholders.     
BHP Billiton will also offer to sell under the Sale Facility its 6% holding     
of BHP Steel shares to ensure a minimum supply of BHP Steel shares under the    
Offer.                                                                          
BHP Steel shares will be sold under the Sale Facility at the final price        
determined following the close of the institutional bookbuild process (see      
below) (the "Final Price").  An indicative price range of  $2.60 to $3.30       
per BHP Steel share has been determined by BHP Billiton after consultation      
with the Joint Global Coordinators, and is based partly on preliminary          
indications from potential investors.  The Final Price will be determined by    
BHP Billiton after consultation with the Joint Global Coordinators and may      
be set above, within or below the Indicative Price Range.  The Final Price      
is expected to be announced on Monday, 15 July 2002.                            
BHP Billiton retains the right not to proceed with the Sale Facility, or to     
proceed with the Sale Facility but not sell all of the BHP Steel shares         
available for sale.  If the Sale Facility does proceed, BHP Billiton will       
first sell under the Sale Facility all of the 6% of BHP Steel shares held by    
it on its own behalf.                                                           
Details of the Sale Facility are contained in the Scheme Booklet, the           
Shareholder Prospectus (for Australian and New Zealand BHP Billiton Limited     
shareholders) and the Sale Facility Circular (for other BHP Billiton Limited    
shareholders).                                                                  
Offer                                                                           
It is intended that the Offer will consist of a minimum of 54 million BHP       
Steel shares, being the BHP Steel shares to be offered for sale by BHP          
Billiton and the estimated number of BHP Steel shares to be offered for sale    
on behalf of Ineligible Overseas Shareholders.  The BHP Steel shares which      
eligible BHP Billiton Limited shareholders offer to sell under the Sale         
Facility will also form part of the pool of BHP Steel shares for sale under     
the Offer.  Accordingly, the actual number of BHP Steel shares being offered    
for sale under the Offer is expected to exceed 54 million BHP Steel shares.     
The Offer will be structured in two parts:                                      
the Retail Offer - to retail investors in Australia and New Zealand,            
including BHP Billiton Limited shareholders in Australia and New Zealand;       
and                                                                             
the Institutional Offer - to Australian institutional investors and             
participating member organisations of ASX and, to the extent permitted by       
applicable law, international institutional investors.                          
The price ultimately paid by successful applicants under the Retail Offer       
and the Institutional Offer will be the Final Price (described above).          
Details of the Offer are contained in the Shareholder Prospectus being sent     
to BHP Billiton Limited shareholders in Australia and New Zealand with the      
Scheme Booklet, and in the Retail Prospectus available to other prospective     
BHP Steel investors in Australia and New Zealand.  The prospectuses are         
available on our website to BHP Billiton Limited shareholders and other         
potential retail and institutional investors, except to persons in the          
United States.                                                                  
BHP Steel is expected to commence trading on ASX (on a conditional and          
deferred settlement basis) on Monday, 15 July 2002.                             
Copies of the Scheme Booklet and other information relating to the demerger     
of BHP Steel will be available on our Internet site:                            
http://www.bhpbilliton.com.                                                     
BHP Billiton Shareholder enquiries can be directed to the BHP Billiton Share    
Department on 1300 655 140 (within Australia only) or (61 3) 9609 3333          
(International) weekdays between 9.00a.m. and 5.00p.m. (Australian Eastern      
Standard Time).  Alternatively, please send an email to                         
share.department@bhpbilliton.com.                                               
Advisers                                                                        
ABN AMRO Corporate Finance Australia Limited and Credit Suisse First Boston     
Australia Limited are acting as financial advisers to BHP Billiton on the       
demerger of BHP Steel.                                                          
Appendix B                                                                      
Bonus Issue Formula                                                             
The total number of bonus BHP Billiton Plc shares to be issued will be          
determined by the following formula:                                            
A  =    (B x C)     Where:  A =  number of bonus BHP Billiton Plc               
        x (D /                   shares to be issued                            
        E)                                                                      
        F - (B x                                                                
C / E)                                                                  
                            B =  VWAP of BHP Steel shares sold                  
                                 under the Sale Facility and BHP                
                                 Steel shares traded on ASX during              
the first five trading days                    
                            C =  number of BHP Steel shares to                  
                                 which BHP Billiton Limited                     
                                 shareholders are entitled under                
the Scheme (including any BHP                  
                                 Steel shares sold on behalf of                 
                                 Ineligible Overseas Shareholders*)             
                            D =  number of BHP Billiton Plc shares              
on issue as at the BHP Billiton                
                                 Plc record date (expected to be 19             
                                 July 2002)                                     
                            E =  number of Fully Paid BHP Billiton              
Limited shares in issue as at the              
                                 BHP Billiton Limited record date               
                                 (expected to be 5 July 2002)                   
                            F =  VWAP of BHP Billiton Plc shares                
traded on the LSE over the same                
                                 five day trading period used to                
                                 calculate the VWAP of BHP Steel                
                                 Shares                                         
Note:  VWAP = Volume Weighted Average Price                                     
* This number does not include the BHP Steel shares to be sold by BHP           
Billiton Limited as they are not being distributed to BHP Billiton Limited      
shareholders.  The proceeds from the sale of these BHP Steel shares will        
benefit BHP Billiton and, as a consequence, all BHP Billiton shareholders       
The VWAP of BHP Billiton Plc shares (F) is reduced by the value distributed     
per BHP Billiton Limited share (B x C / E) to calculate a theoretical ex        
bonus price for BHP Billiton Plc.                                               
For illustrative purposes, based on the mid-point of the Indicative Price       
Range and using a BHP Billiton Plc share price of 3.66 (being the closing      
price of 3.88 on 8 May 2002, adjusted to give a theoretical ex bonus           
price), and the Australian dollar/British pound exchange rate of 2.6940 as      
at 9 May 2002, approximately 139 million new BHP Billiton Plc shares would      
be issued.  This equates to 2.3% of the aggregate number of ordinary shares     
on issue by BHP Billiton, or approximately a one for 16.72 issue of BHP         
Billiton Plc shares.  The actual number of BHP Billiton plc shares to be        
issued will depend on the actual value of BHP Steel and BHP Billiton as set     
out above and may be higher or lower than this indicative figure.               
Date: 13/05/2002 07:54:23 AM Produced by the SENS Department