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Glencore, the secretive Swiss commodities trader, took a step towards a public listing valuing it at more than US$35 billion (RM120.26 billion), as investors bought bonds that could give them a near 6 per cent stake.
The US$2.2 billion deal raises the prospect of the sometimes controversial firm adapting its prized employee-owned model, accepting greater public scrutiny in return for access to the deeper pool of capital offered by a stock market listing.
Any eventual public listing could yield big windfalls for key leaders as 66 managers owned 46.4 per cent of the share capital last year, according to a bond prospectus filed in July.
It would also play into a warming global market for listings as investors recover their appetite for risk.
Led by chief executive Ivan Glasenberg and chairman Willy Strothotte, who also chairs sister company Xstrata, the firm is one of the world’s largest producers and traders of commodities and raw materials.
Capping months of rumours, Glencore said yesterday that it had sold convertible bonds to a group of investors, including energy-focused private equity firm First Reserve.
Other buyers include Singaporean sovereign wealth fund Government of Singapore Investment Corporation (GIC), United States fund manager BlackRock and Zijin Mining Group, China’s largest listed gold company.
“This transaction, in which Glencore is opening up its equity capital to outside investors, marks an important milestone as we embark on the next stage of our corporate development,” the Baar-based company said in a statement.
Glencore prides itself on a tight-knit culture, refusing to hire senior staff from outside, and says giving staff big stakes helps keep it profitable, prudent and long term in focus.
It was founded by Marc Rich, the one-time fugitive pardoned by then US President Bill Clinton in 2001, but he sold out to management.
Henri Alexaline, senior credit analyst at BNP Paribas, said: “The credit crisis was a wake-up call that reminded the group of some structural weaknesses of being a private company.”
However, he said that while the deal was a milestone, any initial public offering (IPO) remained a “long shot” that could take years.
The bonds mature in 2014 and pay a 5 per cent coupon. But investors can choose to convert them to shares if Glencore stages a “qualifying” IPO or in certain other circumstances.
Glencore said the bonds value the firm’s equity, before their conversion, at US$35 billion — meaning if all US$2.2 billion worth was converted, the investors would own 5.9 per cent of the enlarged US$37.2 billion equity base.