Glencore Raises $2.5 Billion in Share Issue -- Update
16 Setembro 2015 - 6:24AM
Dow Jones News
By Alex MacDonald
LONDON--Commodities giant Glencore PLC on Wednesday said it
raised about GBP1.63 billion ($2.5 billion) in a share placing to
institutional investors, receiving strong support for the
fundraising that forms part of a broader debt-reduction plan.
The Swiss trader and producer said it would issue 1.31 billion
new shares at 125 pence a share, a 2.4% discount to Tuesday's
closing share price of 128.05 pence. The total number of new shares
equates to 9.99% of the company's existing share base, allowing it
to raise the maximum amount it was targeting.
The share sale is part of a raft of measures the company
announced last week to cut debt against the backdrop of weaker
commodity prices. Glencore has also scrapped its dividend, pledged
to cut spending, sell assets and temporarily shut down two
unprofitable mines in Africa. The effort is aimed at reducing the
company's net debt by a third to around $20 billion by the end of
2016.
Glencore received "excellent support from our existing
shareholders and outside investors," a person familiar with the
matter said. "[The] capital raising plan is now done and we can
focus on the rest of the debt-reduction plan. We move on," the
person added.
The company's senior management including Chief Executive Ivan
Glasenberg, Chief Financial Officer Steven Kalmin and several board
members acquired 22% of the offered shares, spending a combined
GBP360 million to maintain their stakes in the company. Mr.
Glasenberg, Glencore's second-largest shareholder after
sovereign-wealth fund Qatar Holding LLC, spent GBP138 million to
maintain his 8.4% stake.
Glencore's shares rose more than 4% after the pricing was
announced before falling back to trade 1.3% higher, outperforming a
0.5% fall for the FTSE 350 mining index. The company has been the
worst performing stock in the U.K.'s FTSE 100 index so far this
year amid the collapse in commodity prices. Against the backdrop of
weaker prices, Glencore has come under pressure to cut debt and
improve profit to avert a credit rating downgrade.
The debt-reduction measures are among the most drastic taken by
any mining company in a sector that has been racked by falling
prices for everything from iron ore to oil to copper as demand in
China wanes and supplies build up.
Glencore, a trading company founded by controversial financier
Marc Rich and built into a mining powerhouse by Mr. Glasenberg, has
been the worst hit. Its shares have fallen 56% since the beginning
of the year and about three quarters since its London share listing
in 2011. Competitors such as Rio Tinto PLC and BHP Billiton Ltd.
have also suffered, losing 21% and 13%, respectively this year.
Glencore has been hit particularly hard because of price falls
for copper and coal, two of its most important earnings
drivers.
The company is the world's largest thermal coal exporter and
largest copper supplier. Since Glencore bought mining giant Xstrata
in 2013, prices for those two commodities, and several others, have
fallen to multiyear lows, with copper dropping to a more than
six-year low last month.
Write to Alex MacDonald at alex.macdonald@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 16, 2015 05:09 ET (09:09 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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