Glencore scrambles on asset sales, debt concerns

Glencore chief executive officer Ivan Glasenberg told staff that a plan to curb debt is sufficient, there is about $US13.5 billion of available liquidity and the company “will emerge even stronger”.


The sale is being managed for Glencore by Citigroup and Credit Suisse.

To boost investor confidence, the company this week disclosed separate United Kingdom regulatory filings showing Gelcnore chairman Tony Hayward purchasing 100,000 shares for about $US138,000, board member John Mack-Morgan Stanley’s former CEO-purchasing 550,000 shares for about $US673,000 and Independent nonexecutive Director William Macaulay bought 1.7 million shares for about $US2.3m.

Short sellers have profited by billions of dollars by betting on negative sentiment towards commodities groups, which are expected to be hit hard by a slowdown in the Chinese economy. Glencore’s share price has since bounced back from its low of 67 British pence and was trading at around 90 pence on 1 October 2015.

In what Barclays called an “encouraging meeting” that “helped to clear up many misconceptions and confusion we believe is now in the market around commodity trading in general”, Glencore unveiled details about its highly scrutinised commodities trading business. The Swiss-based commodities trader and miner’s ability to service heavy debts has been posing a major challenge for the company and a concern among investors. Glencore, according to one analyst, is seen as a proxy for the commodities sector because of its size, diversity and the tradeability of its shares.


In a meeting with credit analysts held Wednesday in London, other Glencore officials reiterated those points. Towards this debt reduction target, Glencore is planning to conclude two deals by the end of this year or early of next year. Glencore also said it is still considering closing its Eland platinum mine in South Africa due to falling prices, putting more than 900 jobs at risk. The latest insurance cost is still very high historically, but shows that investor fears may be starting to ease. The agricultural arm’s earnings before interest and taxes a year ago was $856 million for Glencore, nearly a third of its marketing division’s profit, according to the company’s annual report. An earlier version of this article incorrectly stated the announcement was made this month.

Glencore tells investors it is on track to reduce debt -Barclays