The mining giant Anglo American plc (AAL.L) suspended its dividend after posting $5.5B loss. The company also announced that it would be cutting 60% of its workforce.
From the statement:
Mark Cutifani, Chief Executive of Anglo American, said "We are taking decisive action to sustainably improve our cash flows and materially reduce net debt, while focusing on our most competitive assets."We have detailed a series of measures, including $1.9 billion of additional EBIT benefits from cost and productivity improvements to deliver positive free cash flow in 2016 and beyond, and an additional $3-4 billion in asset disposal proceeds. As a result, we are targeting net debt of less than $10 billion in 2016, assuming current commodity prices and exchange rates. In the medium term, we are targeting net debt of $6 billion, supporting a return to a solid investment grade credit rating."We of course recognise the current challenging environment in which to deliver disposals. We are already engaged with parties interested in several of our assets, but we will only complete those transactions which deliver appropriate value for our investors. So, while we have accelerated our disposal processes, and given our targeted positive free cash flow and our robust liquidity position, we will take appropriate time to secure value outcomes from the disposal programme."Our core portfolio creates a highly attractive, competitive and well balanced business, with the leverage of scale, technical expertise and mineral endowment options, which offer considerable upside potential over the long term. By taking such action, we create a Group that will also be significantly stronger in the short term - it will be streamlined, focused, with lower overhead and indirect costs and positioned to deliver robust profitability and cash flows through the cycle."We will focus our portfolio on our global leadership positions in diamonds and platinum group metals and our world-class position in copper. This unique combination of assets, enhanced by our commercial marketing expertise, will have the advantage of benefiting from the ongoing shift away from infrastructure investment towards consumer-driven demand, positioning Anglo American for these expanding markets. We will manage our other assets, in bulk commodities and other minerals, for cash generation or disposal over time."This is a period of considerable change in Anglo American's long history of evolution and I appreciate the support of all our employees and stakeholders in helping to deliver the sustainable value that we all demand and expect. We are creating the new Anglo American."