Orica will pursue the separation of its chemicals business
from its core mining services business, either by demerger or sale.
The company said in a statement that the separation of the
businesses would allow Orica to focus on its core Mining Services activities
and capitalise on its global leadership positions in commercial explosives,
ground support and sodium cyanide.
Orica Chemicals is a leading supplier of chemical products
to the mining, water treatment and other industrial, food and cosmetics markets
in Australia, New Zealand with a growing presence in Asia and Latin America.
Its annual revenue is approximately $1.2 billion. A demerger would create a
separate ASX listing for the Chemicals business.
It is expected that
Orica Chemicals would benefit from the freedom to develop its own corporate
strategy, capital structure and financial policies appropriate for the business
as a separately listed entity.
Orica said it had received a number of offers from parties
looking to acquire the chemicals division. It added that, while the offers will
be considered, its preferred option was demerger.
The company will give a further update on the proposed
separation at its full year results announcement on 19 November 2014.
The possible sale of the chemicals business was flagged earlier this year, following Orica’s first fall in underlying profit since 2001.