WMC Demerger

Document date:  Mon 28 Oct 2002
Published:  Mon 28 Oct 2002 00:00:00
Document No:  196950
Document part:  A
Market Flag:  Y
Classification: 

WMC LIMITED                                   2002-10-28  ASX-SIGNAL-G

HOMEX - Melbourne                                                     

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WMC Limited today said its proposal to demerge the group's resources
and alumina businesses had moved another step closer with this
morning's Supreme Court approval to convene the shareholder meetings
necessary to approve the scheme.

The scheme booklet has now been lodged with the Australian Securities
and Investments Commission and the Australian Stock Exchange.

The booklet is available on the WMC website and copies of the
booklet are being mailed to shareholders from today.

If approved by shareholders and the Court, WMC will be divided into
two separate companies which commence trading on the ASX on December
4. WMC Resources will trade on a deferred settlement basis.)

The two companies will be:

* Alumina Limited which will hold WMC's 40 per cent interest in Alcoa 
World Alumina and Chemicals joint venture; and 

* WMC Resources Ltd which will hold all of WMC's businesses other than
its interest in AWAC. These include WMC's nickel, copper-uranium and 
fertilizers businesses and its exploration and development interests.

"Following an extensive review of the options for WMC shareholders
after an approach by Alcoa last year the WMC board believe that the
demerger is in the best interests of all shareholders," WMC chairman
Ian Burgess said today.

"The demerger creates valuation transparency for AWAC, it enables
WMC Resources to grow as all independent company and it creates
greater investor and corporate flexibility."

The demerger requires a series of steps including a scheme of
arrangement, a capital reduction and dividend (the proceeds being
applied by WMC on behalf of shareholders to acquire the shares in
WMC Resources) and the approval of WMC shareholders and the Victorian
Supreme Court.

If the demerger is approved, eligible WMC shareholders will receive
one WMC Resources share for every WMC share held when the Register
closes on 9 December 2002. They will retain their holding of WMC
shares but those shares will trade under WMC's new name, Alumina
Limited. 

"Shareholders will own two financially sound, premium resource
companies with outstanding assets, strong positions in important
commodities and exciting growth prospects," Mr Burgess said.

KEY ELEMENTS OF THE DEMERGER:

* The demerger incorporates the share scheme, a capital reduction and
the share scheme dividend;

* Each WMC director recommends shareholders vote in favour of the
resolutions required to implement the demerger;

* The report of independent expert Grant Samuel & Associates Pty 
Limited concludes that the demerger is in the best interests of WMC
shareholders;

* The demerger is not expected to result in any material tax
consequences for WMC shareholders resident in Australia who hold
their shares on capital account and elect to claim CGT demerger
relief;

* Alumina Limited will retain WMC's current ASX and NYSE listings. It
is intended WMC Resources will be listed on the ASX and NYSE;

* Eligible WMC shareholders will not be called on to make any cash
payment nor will they receive any cash as a result of the demerger;

* Alumina Limited will be allocated $600 million of WMC's existing 
debt and the remainder of WMC's existing debt will be assumed by WMC
Resources;

* WMC Resources' net debt at 30 June 2002 would have been $1.66
billion. Net debt to total capital would have been 31.7%;

* Standard & Poor's has indicated that WMC Resources will be assigned 
a long term at credit rating of BBB (stable).

Key steps in implementing the demerger:

* WMC shareholders will vote on the share scheme and related
resolutions at meetings on November 29 and if the demerger is
approved: 

- WMC will apply to Supreme Court for approval of the share scheme on 
December 2;

- Alumina Limited and WMC Resources shares will commence trading on 
ASX and NYSE on December 4 (with WMC Resources trading on a deferred 
settlement basis; and 

- The internal transfers and other legal procedures to implement the 
demerger will take place on or before December 11.

For further information contact

Media contact: 

Tania Price 
Group Manager - Public Affairs 
Telephone: (03) 9685 6233 
Mobile:    0419 502 852
www.wmc.com

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