WMC puts split vote on hold (April 19, 2002)

Diversified Aussie miner WMC (WMC-N), says it will postpone a vote by shareholders on its plan to divide itself into an aluminium unit and a diversified metals unit as it awaits regulatory approvals and new demerger laws.

The vote was to take place at the company’s extraordinary general meeting slated for June 18. The meeting will still happen, but the vote will not. The company says it should be deferred for no more than three months.

The company said regulatory approval from the U.S. Securities and Exchange Commission was taking longer than expected. Also, the company is eyeing potential tax benefits arising from new Australian demerger legislation, which is slated for introduction to parliament by June.

WMC said that if the legislation is enacted, it would allow for a simplified demerger structure, permitting the company to remain a listed group holding the aluminium interests instead of creating a new company.

The company said, “if demerger tax relief legislation is not enacted by the end of June, the board will assess its progress and determine whether to continue with the original demerger proposal or pursue a revised demerger structure.”

WMC said in a prepared statement that it remains firmly committed to the demerger proposal, and that the short delay is in the best interest of the company’s shareholders.

Last November, WMC tabled plans to split into two separate Australia-listed companies after shooting down a potential A$11-billion bid from U.S. aluminium giant Alcoa (AA-N).

The plan would separate WMC’s 40% stake in Alcoa World Alumina & Metals (AWAC) from its Olympic Dam, nickel and fertilizer divisions. Alcoa, which holds 60% of AWAC, was looking to consolidate AWAC by swallowing up WMC.

Severing the assets, said WMC, would best serve shareholders by eliminating any of the perceived uncertainties posed by the AWAC agreement on the valuation of its three other wholly owned businesses.