25th Sep 2015 15:36
LONDON (Alliance News) - Glencore PLC has hired two banks to sell a minority stake in its agricultural business in a deal that could value the whole division at USD12 billion, according to a report by Bloomberg.
Glencore's entire market capitalisation is GBP13.71 billion.
Bloomberg said that "a person familiar with the situation" revealed that the multi-commodities miner and trading house has hired Citigroup Inc and Credit Suisse Group AG to organise the sale, adding that it is in talks with about a dozen sovereign wealth funds and Asia-based trading houses. It is likely to sell the stake to a group of funds of trading houses rather than to a single party.
The sale is part of a debt-cutting programme by Glencore Chief Executive Ivan Glasenberg announced earlier in the month, which includes the sale of USD2.5 billion of new stock, asset sales, spending cuts and suspending the dividend. All in all, the measures aim to reduce the company's debt to USD20 billion from USD30 billion.
Bloomberg added that Glencore estimates that its agriculture unit is worth about 8 to 11 times earnings before interest, tax, depreciation and amortisation. It generated Ebitda of USD1.21 billion last year and USD332 million in the first half of 2015.
http://www.bloomberg.com/news/articles/2015-09-25/glencore-said-to-hire-banks-to-sell-stake-in-agriculture-unit
Glencore shares were trading down 1.6% at 96.95 pence late Friday, having dropped to an all-time low of 95p earlier in the day before shooting up to 101.7p.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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