Glencore
- Thread starter berisford
- Start date
TelesnaAg
Member
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- Portland, Victoria - Australia
I work for them....share price is not looking good...
Ant...
Ant...
TelesnaAg
Member
- Location
- Portland, Victoria - Australia
Share price is in free fall today..
Oilseed and Pulse Trader
Member
Shares down 31% today!
TelesnaAg
Member
- Location
- Portland, Victoria - Australia
Crazy...thing is the earnings haven't dropped 31% today...everything will keep going as normal, I'd say there could be some good buying here at this...however will wait and see what the investment bankers say..I remember being with riotinto when we were once $150 and we got to $26...the world was going to end...
Ant..
Ant..
Oilseed and Pulse Trader
Member
The market prices in future earnings and with such a high debt load and trying to offset assets Glencore doesn't look rosy. The value of the company is likely lower than their debt!
TelesnaAg
Member
- Location
- Portland, Victoria - Australia
It was the Same with rio and there debt....I know the share price is off future predictions...but at the end of the day if they are making the money the debt will get paid etc....tough times no doubt...
Ant...
Ant...
Oilseed and Pulse Trader
Member
Copper and Iron Ore prices are below cost of production so they are not making money.
Oilseed and Pulse Trader
Member
Maybe they should go protesting at Brussels and drive mining trucks into the police riot vans???
TelesnaAg
Member
- Location
- Portland, Victoria - Australia
Copper Is below, they don't have any iron ore, coal is below, trading house needs good credit rating.
Will be interesting to see where all this sits by Friday...
Ant...
Will be interesting to see where all this sits by Friday...
Ant...
Steevo
Member
- Location
- Gloucestershire
Are the share prices of other ag. merchants suffering also, or just Glencore?
Baling Hay
Member
It is mining that is falling hard, not the trading arm but the mining bit is bringing the whole company down with it!
llamedos
New Member
This was from last friday.
Glencore Plc hired Citigroup Inc. and Credit Suisse Group AG to sell a minority stake in its agricultural business, a deal that could value the whole division at as much as $12 billion, according to a person familiar with the situation.
The Swiss-based company is in talks with about a dozen sovereign wealth funds and Asia-based trading houses, according to the same person, who asked not to be identified because the negotiations are private.
The sale is part of a debt-cutting program by Glencore’s billionaire Chief Executive Officer, Ivan Glasenberg, announced in early September. The plan included selling $2.5 billion of new stock, asset sales, spending cuts and suspending the dividend. Taken together, the measures aim to reduce the company’s debt from $30 billion to $20 billion.
Glencore is likely to sell the minority stake to a group of sovereign wealth funds and Asian trading houses, rather than to a single party, the same person said.
A Glencore spokesman declined to comment.
Agriculture Unit
The company estimates the agriculture unit is worth about eight to 11 times earnings before interest, tax, depreciation and amortization, the person said. Glencore’s agricultural business generated Ebitda of $1.21 billion last year and $332 million in the first half of 2015.
Glencore shares fell 1.4 percent to close at 97.22 pence in London. The stock earlier touched an all-time low of 95 pence, before briefly rallying as much as 8 percent after the news of the grain unit sale. It sold shares in an initial public offering at 530 pence in May 2011.
The company believes that a group of investors could provide itsagricultural unit with the funding to grow further -- something that Glencore would struggle to do alone after the price of key commodities such as coal and copper plunged.
Glencore became a major agriculture player when it bought Canadian grain handler Viterra Inc. for C$6.1 billion ($4.6 billion) in 2012. Nonetheless, it still has no presence in the most important grain market of all: the U.S.
Recent Deals
The commodities industry has seen a flurry of deals in agriculture over the last three years as Middle Eastern and Asian buyers step into the market. The deals include Mitsubishi Corp. paying about $1 billion for a 20 percent stake in food trader Olam International Ltd. last month.
The agricultural trading industry has long dominated by U.S. and European houses, in particular a group known as "ABCD" for the initials of Archer-Daniels-Midland Co., Bunge Ltd., and Cargill Inc. and Louis Dreyfus Commodities.
In April, a Saudi state-owned company partnered with Bunge to buy a majority stake in the former Canadian Wheat Board. The C$250 million ($203 million) deal gave Riyadh access to grain exports from Canada.
Other deals in agriculture involving Asian and Middle East buyers include Marubeni Corp., one of Japan’s top-five trading houses, buying U.S. grain merchant Gavilon Holdings LLC in 2013 for $2.7 billion plus debt to expand in North America.
Cofco Spending
Cofco Corp., China’s largest food company, also spent $3.5 billion last year to build a global trader, acquiring controlling stakes in Noble Group Ltd.’s grains arm and Nidera BV.
Chris Mahoney, a member of a British rowing crew that won silver in the 1980 Moscow Olympics, heads Glencore’s agriculture division and oversaw the takeover of Viterra. The company is now one of the world’s two leading traders of wheat, handling about a fifth of the global seaborne trade.
Glencore is among the top three agricultural exporters in Russia, the European Union, Canada and Australia.
Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a senior independent non-executive director at Glencore.
Credit Bloomberg Business
llamedos
New Member
Grain Buyer
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- Location
- Omnipresent
they look cheap. I'd buy some if I had a fair chunk of spare cash.
TelesnaAg
Member
- Location
- Portland, Victoria - Australia
Markets tend to frenzy...when going down and when going up...
It will take a while for this to level out...
I assume they have put the ag businesses up for sale as they will move fast...
Selling a mine could be hard work ATM.
Ant...
It will take a while for this to level out...
I assume they have put the ag businesses up for sale as they will move fast...
Selling a mine could be hard work ATM.
Ant...
llamedos
New Member
Glencore is in talks with a Saudi Arabian sovereign wealth fund and China's state-backed grain trader COFCO, along with Canadian pension funds, to sell a stake in its agricultural assets, sources familiar with the matter told Reuters.
Selling assets is one prong of a wider strategy by the Swiss-based trader and miner to cut about a third of its $30 billion (£19.8 billion) debts and regain investor trust, after its shares tumbled by about three-quarters this year to record lows in tandem with weak global commodity prices.
Glencore declined to comment while COFCO was not immediately available to comment.
Last month Glencore said it was hoping to raise $2 billion from selling assets including a minority stake in its agriculture assets by early next year. The sources did not say the likely size of the stake being sold or the likely amount it would raise.
UBS analyst Myles Allsop has valued Glencore's entire agriculture business at between $10 and $12 billion.
Sources said Glencore is creating a separate legal entity for the assets involved, expected to be mostly those inherited from the C$6.1 billion purchase of Canadian grain handler Viterra in 2012, a deal which boosted its grain operations in Canada and Australia in particular.
One source said Glencore was considering selling minority stakes to several parties but no more than 49 percent of the new entity. "They are (agricultural assets) a business that Glencore wants to grow, but that requires capital and Glencore doesn't want to put the capital into it because of the balance sheet ... so they say let's sell part of it," said a source.
It was not clear which Saudi Arabian sovereign wealth fund was involved in the talks, but state-backed Saudi Agricultural and Livestock Investment Co (SALIC) has been active in the sector, having entered a joint venture with U.S. grain trader Bunge Ltd to invest in Canadian grain handler CWB in April.
SALIC did not respond to a request for comment.
China's COFCO has also been expanding its agriculture activities, having invested $2.8 billion in 2014 via joint ventures with Noble Group's agribusiness and Dutch grain trader Nidera, after taking substantial stakes in the companies.
Two sources said Canadian pension funds and Japanese trading houses were also interested in a stake in Glencore's agriculture assets.
One banker said Canadian pension fund CPPIB is taking a close look at the opportunity.
CPPIB declined to comment
Sources said Glencore had appointed banks Citigroup and Credit Suisse to handle the sale.
Credit Reuters
Selling assets is one prong of a wider strategy by the Swiss-based trader and miner to cut about a third of its $30 billion (£19.8 billion) debts and regain investor trust, after its shares tumbled by about three-quarters this year to record lows in tandem with weak global commodity prices.
Glencore declined to comment while COFCO was not immediately available to comment.
Last month Glencore said it was hoping to raise $2 billion from selling assets including a minority stake in its agriculture assets by early next year. The sources did not say the likely size of the stake being sold or the likely amount it would raise.
UBS analyst Myles Allsop has valued Glencore's entire agriculture business at between $10 and $12 billion.
Sources said Glencore is creating a separate legal entity for the assets involved, expected to be mostly those inherited from the C$6.1 billion purchase of Canadian grain handler Viterra in 2012, a deal which boosted its grain operations in Canada and Australia in particular.
One source said Glencore was considering selling minority stakes to several parties but no more than 49 percent of the new entity. "They are (agricultural assets) a business that Glencore wants to grow, but that requires capital and Glencore doesn't want to put the capital into it because of the balance sheet ... so they say let's sell part of it," said a source.
It was not clear which Saudi Arabian sovereign wealth fund was involved in the talks, but state-backed Saudi Agricultural and Livestock Investment Co (SALIC) has been active in the sector, having entered a joint venture with U.S. grain trader Bunge Ltd to invest in Canadian grain handler CWB in April.
SALIC did not respond to a request for comment.
China's COFCO has also been expanding its agriculture activities, having invested $2.8 billion in 2014 via joint ventures with Noble Group's agribusiness and Dutch grain trader Nidera, after taking substantial stakes in the companies.
Two sources said Canadian pension funds and Japanese trading houses were also interested in a stake in Glencore's agriculture assets.
One banker said Canadian pension fund CPPIB is taking a close look at the opportunity.
CPPIB declined to comment
Sources said Glencore had appointed banks Citigroup and Credit Suisse to handle the sale.
Credit Reuters
Grain Buyer
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interesting development, will this stop anyone dealing with Glencore?