Votes mailed in were overwhelmingly in favour of the spin-off, which will give all BHP Billiton shareholders one share in South32 for every BHP Billiton share they own.
BHP Billiton’s shareholders back South32 spin-off in proxy vote
PERTH/LONDON (Reuters) - A vast majority of BHP Billiton's shareholders voting by proxy have approved the spin-off of the global miner's smaller assets into South32 on Wednesday, as expected, paving the way toward a listing on May 18.
BHP CEO Andrew Mackenzie said that more than 3 billion proxy votes had been received and some 98 percent had been in favour of the demerger.
Final vote results will be announced later on Wednesday.
“This is a strong vote of confidence in the strategic direction of BHP Billiton and the future of South32,” Mackenzie said in a meeting with journalists.
Named after the 32nd parallel line of latitude that links its business centres in Perth and Johannesburg, South32 will produce alumina, aluminium, coal, manganese, nickel, silver, lead and zinc from mines and smelters in Australia, Brazil, Colombia, South Africa and Mozambique.
Those assets, long overshadowed by BHP's much larger iron ore, petroleum, copper and coal businesses, generated underlying earnings of $446 million on revenue of $8.3 billion last year.
Forecasts on how much the new company will be valued at have slumped to between $5 billion and $10 billion since the spin-off was announced last year, as prices for its main products have fallen.
The stock is set to face selling pressure from UK investors who cannot hold the stock as it will not be included in the FTSE indexes. However that is likely to be offset by passive funds in Australia buying South32 shares as they will be included in the major S&P/ASX indexes.
Among the main challenges facing the company are extending the lives of its mines, which are mostly set to run out within 10 to 20 years, and tackling black empowerment issues, coal supply contracts and power supply constraints in South Africa.
JOIN OUR PULSE COMMUNITY!
Eyewitness? Submit your stories now via social or:
Email: eyewitness@pulse.ng