Glencore Shares Hit New Low
15 Setembro 2015 - 10:10AM
Dow Jones News
LONDON—Glencore PLC shares hit a new low Tuesday, reversing last
week's gains after the commodities trader and producer announced a
debt rescue plan.
Shares in the Swiss commodities trader and producer fell 4.6% to
120.5 pence a share in mid afternoon European trade, cementing the
firm's ranking as the worst performer out of the U.K.'s blue chip
FTSE 100 index so far this year. The rest of the U.K. mining sector
also fell, with the FTSE 350 mining index down 1.6% and other large
miners such as Rio Tinto PLC and BHP Billiton PLC down 1.3% and
1.2% respectively.
The Swiss miner's shares have fallen nearly 60% since the
beginning of the year and by more than three quarters since its
London share listing in 2011.
The reason: a continued collapse in a basket of commodities
prices including copper and coal, two of its most important
earnings drivers. The company has also been hit by growing
uncertainty about the timing and structure of the proposed equity
issue of up to $2.5 billion as it seeks to pay down debt and stave
off a potential credit rating downgrade.
Glencore last week announced $10 billion worth of measures aimed
at cutting its net debt by a third to around $20 billion by the end
of 2016. This helped boost the company's shares.
But with Glencore's share price continuing to fall, some
analysts say the company may need to issue more shares to raise
funds.
"The more the share price drops, the more dilutive [issuing new
stock] becomes. They will have to issue more shares to achieve the
same level of funding," said Carole Ferguson, an equity analyst at
advisory firm SP Angel.
A Glencore spokesman declined to comment.
Glencore has also been troubled by its biggest bets not panning
out as prices fall for nearly every commodity, from copper to coal,
oil to zinc. The rout has raised new concerns about Chief Executive
Officer Ivan Glasenberg's decision to acquire Anglo-Swiss miner
Xstrata PLC for $29.5 billion, taking Glencore away from its
trading house roots.
The purchase catapulted Glencore into the mining big league,
making it the world's largest thermal coal exporter and largest
copper supplier. Since then prices for those two commodities, and
several others, have fallen to multiyear lows due to
weaker-than-expected demand from China, the world's largest
consumer of those commodities, and excess supply.
Copper dropped to a more than six-year low last month while the
benchmark price for thermal coal from South Africa fell to its
lowest level since 2007.
Write to Alex MacDonald at alex.macdonald@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 15, 2015 08:55 ET (12:55 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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