Tuesday, May 3, 2011

Glencore pricing values firm at about $61 billion

GENEVA (AP) -- Commodities giant Glencore International PLC said Wednesday that its partial share float later this month could value the company at $61 billion, making it one of the biggest initial public offerings in recent years.

The Swiss-based company aims to sell part of its shares for between 4.80-5.80 pounds ($8-$9.67) on the London Stock Exchange starting May 24, catapulting it straight into the FTSE 100 on the first day of trading. A secondary floatation is planned in Hong Kong on May 25.

Glencore would raise about $10 billion from the IPO. The money will be used to fund its expansion, such as buying mines and farmland, and increasing its stake in Kazakh zinc producer JSC Kazzinc.

Analysts have also suggested that Glencore might seek to take over Anglo-Swiss mining company Xstrata PLC, in which it already holds a 34.5 percent stake.

Almost a third of the shares available will go to so-called cornerstone investors, the company said.

Among them are Abu Dhabi-based investment fund Aabar Investments PJS. The fund, which has big stakes in automaker Daimler and Italian bank UniCredit, confirmed an $850 million investment in Glencore, with an intention to invest an additional $150 million in the share offering.

Ivan Glasenberg, Glencore's chief executive, said the company looked forward to welcoming new shareholders "as long-term partners in our growth."

Glencore has been at pains to stress to investors that current shareholders, said to be some 500 senior employees, will be prevented from cashing in their shares for several years.

Glencore reported sales of $145 billion in 2010. For many years the privately held company, founded in 1974, was considered the silent giant behind much of the world's trade in raw materials.

Based in the small Swiss town of Baar, it extracts, grows, buys, ships and sells many of the world's staple goods such as coal, copper and corn. It also controls about 3 percent of the global oil trade - a large share in a highly fragmented market.

The company made a net profit of $3.8 billion last year, a 41 percent increase on 2009.


Associated Press writer Tarek El-Tablawy in Cairo contributed to this report.

© 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.

News Update Users