Glencore kicks off $2.5bn placing after shares recover from record low
Mining giant Glencore has launched a $2.5bn (£1.6bn) placing of up to 1,307,794,600 new shares.
The placing, which represents around 9.99 per cent of the firm's issued share capital, is part of the group's plans to reduce net debt by $10.2bn, announced earlier this month.
Glencore’s share price had dropped by almost seven per cent in early trading today, but recovered to close up by 0.12 per cent at 128.05 pence per share.
The company said 78 per cent of the placing will be underwritten by Citi and Morgan Stanley, with commitments from Glencore senior management to take up the remaining 22 per cent of the issue.
Other debt reduction measures include plans to shut down loss-making mines to help reduce a glut of supply that has weighed on prices.
Commenting on the plans when they were first announced, Glencore chief executive Ivan Glasenberg said:
“Notwithstanding our strong liquidity, positive operational free cashflow generation, lack of debt covenants, modest near-term maturities and the recent affirmation of our credit ratings, recent stakeholder engagement in response to market speculation around the sustainability of our leverage, highlights the desire to strengthen and protect our balance sheet amid the current market uncertainty.”