- Sovereign wealth funds of Qatar, Singapore said to advance
- Management presentations are said to start by end of month
Glencore Plc, the commodity trader and miner seeking to pay down $12 billion of debt, has shortlisted a handful of groups to progress through to the next stage of the planned sale of a stake in its agriculture unit.
They include the sovereign wealth funds of Qatar, Singapore and Abu Dhabi, the state-owned Saudi Agricultural and Livestock Investment Co. and the Canada Pension Plan Investment Board, according to two people familiar with the talks, who asked not to be identified as the matter is confidential.
Glencore has said it’s seeking to complete the sale, part of a debt-cutting program announced by billionaire Chief Executive Officer Ivan Glasenberg last year, in the first half of this year. The Swiss firm has been battered as a rout in commodity prices stoked fears about its capacity to pay down its $30 billion debt load.
It’s likely to sell a minority stake to a group of investors rather than to single party, a person familiar with the situation said last year. Glencore’s agricultural business, which has previously been valued by Citigroup Inc. at about $10.5 billion, generated earnings before interest, taxes, depreciation and amortization of $1.21 billion in 2014 and $332 million in the first half of last year.
The company will host management presentations of the business by the end of this month, the people said. Glencore has previously said it was simultaneously considering an initial public offering for the business. It retains that option though favors the sale of a minority stake, the people said. A spokesman for the company declined to comment.
Qatar’s sovereign fund and Canada Pension Plan Investment Board declined to comment. Saudi Agricultural and Livestock Investment didn’t pick up calls to their offices. Singapore’s GIC Pte Ltd. couldn’t be reached outside office hours.
Glencore is seeking to raise as much as $4 billion from selling assets, it said last month. It said then that it would extend a debt-cutting program, aiming to reduce borrowings to $18 billion by the end of this year. The company in December said it had achieved $8.7 billion of its debt-reduction plan.
Glencore shares fell 9.9 percent, the most since September, to close at 71.2 pence in London on Wednesday. The stock has plunged 72 percent over the past year. It sold shares in an initial public offering at 530 pence in May 2011.
Glencore became a major agriculture player when it bought Canadian grain handler Viterra Inc. for C$6.1 billion ($4.2 billion) in 2012.
Peter Grauer, chairman of Bloomberg LP, the parent of Bloomberg News, is a senior independent non-executive director at Glencore.