Commodities giant Glencore (LON:GLEN) has announced plans to reduce its net debt of some £19.8 billion via a proposed equity issuance.
Together with other debt reduction measures, Glencore said it aimed to reduce its net debt “to the low $20 billions by the end of 2016”. The company have said the equity issuance would raise up to $2.5bn.
Glencore have had a difficult year, reporting a first-half loss of $676m in August. They have been hugely hit by falling commodity prices; both copper and coal, two of the company’s biggest products, have fallen to six year lows. Glencore’s market value has fallen more than 50% this year and the firm has been under mounting pressure to improve financial performance; last week ratings agency Standard & Poor’s said it would consider lowering Glencore’s credit rating if the giant did not reduce its debt.
Ivan Glasenberg, Chief Executive Officer, and Steven Kalmin, Chief Financial Officer, said in a statement:
“We remain very positive on the long-term outlook for our business and this is reinforced by senior management’s commitment to take up 22 per cent. of the proposed equity issuance.”
Glencore is currently trading up 8.24 percent on the news (0915GMT)
