Workers at Sierra Rutile. Source: Sierra Rutile/YouTube
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  • Iluka Resources announces its intention to demerge Sierra Rutile Holdings, which will be an ASX-listed, West African mineral sands producer and developer if the demerger proceeds
  • Iluka says the demerger will allow the company to focus its capital allocation priorities and management attention on core Australian assets and development opportunities
  • Outgoing Iluka Chairman Greg Martin will become the inaugural Chairman-elect of demerged Sierra Rutile
  • If approved, the demerger is expected to be completed in 2022
  • ILU shares up 1.97 per cent to $12.68

Iluka Resources (ILU) has announced its intention to demerge Sierra Rutile Holdings, which will be an ASX-listed, West African mineral sands producer and developer if the demerger proceeds.

Iluka said the demerger would allow the company to focus its capital allocation priorities and management attention on core Australian assets and development opportunities.

“A demerger will not only position Sierra Rutile to reach its full potential, but also provides investors the opportunity to choose their desired exposure to each business based on their individual preferences for differing geographic exposures and risk-return profiles,” Managing Director Tom O’Leary said.

Sierra Rutile will be Australia-headquartered and have a few familiar faces from Iluka on its board and executive including outgoing Iluka Chairman Greg Martin, who will become Sierra Rutile’s inaugural Chairman-elect.

Current Sierra Rutile CEO Theuns de Bruyn will transition to the company’s Managing Director and CEO-elect, while Martin Alciaturi has been appointed Finance Director-elect.

Iluka said Sierra Rutile would be financially well positioned to maximise the value of its asset base.

Sierra Rutile’s principal business activities will be the management and operation of its existing Area 1 mine, which encompasses two operations at Lanti and Gangama, a mineral separation plant and a dedicated port facility.

The demerger is subject to board, regulatory and shareholder approvals.

If approved, the demerger is expected to be completed in 2022.

It will involve a capital reduction and in-specie distribution, under which all the shares in Sierra Rutile will be distributed to Iluka shareholders on a pro rata basis in proportion to their existing shareholding in Iluka on a record date to be determined by the Iluka board.

ILU shares were up 1.97 per cent to $12.68 at 10:46 am AEST.

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