BHP Billiton Limited (ASX: BHP) has at long last unveiled the name for its spin-off entity – previously dubbed "NewCo" – with the company to be branded "South32". The name reflects the proposed company's major operations in Australia and South Africa that occur on the 32nd parallel southerly line of latitude.
Source: Sydney Morning Herald
Although the name focuses on its southern hemisphere operations, BHP Billiton has made it clear that the company will have global aspirations. Graham Kerr, the proposed CEO of the new entity said: "The brand is reflective of our heritage and where we have been, it doesn't actually constrain where we are going to go."
The spin-off was proposed as a way to unlock greater shareholder value by allowing both entities to focus on specific operations. While BHP Billiton could increase productivity and efficiency on its four pillar operations, the spin-off could improve productivity and efficiency in divisions including manganese, aluminium, lead, zinc and silver, as well as various coking and thermal coal operations.
BHP Billiton's shares are currently sitting near a six-year low as a result of the waning iron ore and coal prices. Today, it is trading 2.4% lower at just $29.37, putting it on a P/E ratio of 11 times and a 4.4% fully franked dividend yield.
