- Manager says he's not pushing for management change at company
- Glencore shares rally 12% after announcing zinc output cuts
David Herro, the head of international stocks at Harris Associates LP, said he supports the $10 billion debt-reduction plan that Glencore Plc is rolling out in response to a rout in commodity prices.
“Clearly there was too much debt on that balance sheet given what was happening to the price of copper,” Herro, the third-biggest investor in Glencore after Qatar’s sovereign wealth fund and Chief Executive Officer Ivan Glasenberg, said in an interview with Bloomberg Television in New York. “Given the pace of the decline of copper management thought it was important to bolster up that balance sheet.”
Glencore shares have doubled since sliding to a record low early last week. The stock, down 55 percent this year, had slumped amid a rout in commodity prices and mounting concern about the miner and trader’s ability to pay down its $30 billion debt load. Glasenberg this week blamed hedge funds for “distorting” the price of copper, which has dropped 14 percent this year.
“We don’t believe a management change is warranted at all,” Herro said. “We are fully supportive of what’s happening. As a large shareholder we really dont invest as activists.”
Herro, who manages the $27 billion Oakmark International Fund, said in an August interview that he was making a long-term investment in Glencore because “the business at this price is substantially undervalued.”
Glencore jumped as much as 12 percent in London trading on Friday after the company announced plans to cut zinc output by a third. Harris, based in Chicago, owns 5.1 percent of Glencore.