LONDON (Commodity Online): Anglo American Plc, the owner of stakes in the biggest diamond and platinum producers, will raise funds through asset sales.

Sources close to the development revealed that the company might raise at least USD 7 billion by selling assets including its Tarmac and steel units. Tarmac, Anglo’s U.K. asphalt and concrete producer, is expected to fetch about USD 4 billion, while the Scaw Metals steel unit may fetch USD 1 billion.

Get Commodity Trading Tips at lowest rates

Catalao, which produces niobium, a rare metal, and the Copebras fertilizer unit may raise $2 billion. Anglo, led by Chief Executive Officer Cynthia Carroll, announced the asset sales today as part of her largest review of the company since she took control two years back.

Carroll has already sold gold and steel units and pledged to cut $2 billion of costs by 2011.

Industry experts welcomed the development saying that it would make Anglo’s operations more streamlined.

“But, taking this longer-term approach, rather than entertaining an offer for the whole company, leaves the shareholders exposed to the attendant delivery risks for some time,” said a source.

However, till recently, no final decision on the valuation of each unit has been made and any sale won’t start until 2010. London-based Anglo also outlined a plan to sell its zinc mines, which may be sold first, one of the people said. All the assets for sale account for about 11 percent of the group’s earnings before tax, according to their statement today.

Anglo’s stocks rose by 9 pence, or 0.4 percent, to 2,285 pence at the close in London trading. They have advanced 48 percent this year, valuing the company at 30 billion pounds.

Post your comment  (0)

Connect:

Post to Twitter

Post to Facebook