Boston, MA 05/15/2014 (wallstreetpr) – BHP Billiton plc (ADR) (NYSE:BBL) is considering a sale of all or part of its Australian nickel business. The company could also spinoff the assets because it is considering that as an option even as it seeks buyers.
Already a few names are being mentioned as interested in the purchase of Nickel West, the company’s West Australian nickel operation. Among the rumored potential buyers are X2 Resources and Glencore Xstrata.
Analysts believe BHP Billiton plc (ADR) (NYSE:BBL) could fetch up to $459 million in the sale of the business.
The option of spinning off Nickel West could see the company bundle the business with other underperforming assets such as manganese and aluminum into a separate company. However, with talks ongoing about the best approach to deal with the businesses, it remains to be seen what the company eventually decides.
Although the company declined to reveal the potential buyers that it is already in talks with about the sale of the assets, it said Goldman Sachs Inc (NYSE:GS) is advising it through the review process. The company cannot speculate on the timing or outcome of the ongoing talks.
Sliming operations
The last two years have seen widespread assets divestment BHP Billiton plc (ADR) (NYSE:BBL). The company sold about $6.5 billion worth of its assets that included a diamond business and a stake in Browse LNG project. The ongoing asset divestments are part of the slimming efforts that the company is undertaking to simplify its operations.
The divestment of the assets also helps the company to unlock value in the unwanted businesses. More importantly, the ongoing divestments are intended to support financial savings by reducing cost burden.
Good timing
The move to offer Nickel West and other unwanted assets comes at a time when nickel business is booming due to the high prices and strong demand for the commodity. So far this year nickel prices have gone up 50 percent, ridding on the back of the ban on the export of nickel ore from Indonesia. The move has also supported the value of nickel miners.
