Glencore shares jump on faster debt cutting plans
December 10, 2015, 6:08 pm   

Mining giant Glencore`s shares jumped nearly 10% on news it has increased its debt reduction target and cut spending plans in the face of a highly uncertain outlook for commodity prices.

Its debt reduction target is now $13bn from the previous target of $10.2bn.

As a result, Glencore aims to cut its total debts to $18bn-$19bn (£11.8bn-£12.5bn) by the end of 2016, down from a target of "low $20s billion".

Earlier this week, rival Anglo American announced major restructuring plans.

Anglo said it would sell huge chunks of its business and shrink its workforce by nearly two-thirds.

Price crash

Shares in Glencore were up nearly 10% at 91.22p on Thursday morning.

Glencore also announced it would cut its capital expenditure plans to $5.7bn for 2015 from $6bn, and to $3.8bn in 2016 from $5bn.

The mining sector has come under pressure because slowing global demand for raw materials - largely thanks to a slowdown in economic growth in China - has seen commodity prices fall to their lowest level in several years, with iron ore at a 10-year low.

Glencore is currently trying to reduce $30bn of debt, created by its ambitious 2013 takeover of Xstrata. That deal added dozens of mines in numerous countries to the commodity trader`s business, leaving it as one of the world`s biggest miners and traders of the products of those mines.

The company has so far cut production at some of its mines and has suspended dividend payments to shareholders.

In October, Glencore said it had started the sales process for its Australian copper mine in Cobar, New South Wales, and its Lomas Bayas copper mine in the Atacama desert in Chile.

It is also looking to sell a minority stake in its agriculture business.

Glencore said a range of parties had expressed interest in buying a stake in the agriculture business and there had also been interest in the copper mines.

It expects initial bids by mid-December and the deals done by the first half of 2016.



Comments

m1.png m2.png m3.png m4.png m5.png
f1.png f2.png f3.png f4.png f5.png
+ =
Exchange Rates
EUR/USD 1.0661
EUR/BRL 3.4097
EUR/AUD 1.4225
EUR/TRY 4.0387
Weather

London

Jan16      01:56
  1. Humidity 47%
  2. Downwind
  3. Winds 0 kph
Now
-14℃
Latest Videos
VIDEO: The Biology of Bliss and the Human OS - Jamie Wheal
Terror and Tourism: Changing the Travel Landscape
Earth In 2050 - HD Documentary 2015
The drive for gender equality in corporate Japan
Plane touches down then aborts during storm (VIDEO)
The Fermi Paradox II — Solutions and Ideas – Where Are All The Aliens (VIDEO)
Money Survival Tips for Millennials (VIDEO)
Lightning strike explodes a tree (VIDEO)
The Moons of Mars Explained (VIDEO)
3 Reasons Why Nuclear Energy Is Awesome! (VIDEO)
3 Reasons Why Nuclear Energy Is Terrible! (VIDEO)
Nuclear Energy Explained: How does it work (VIDEO)
Latest Photos
best cities for small businesses
Best Jobs in America (PHOTOS)
Inside the coolest private jets (PHOTOS)
The best hotel club floors in the world
Winning Images from the 2015 National Geographic Traveler Photo Contest
PHOTOS: Raging Wildfires Prompt Major Evacuation
Amazing Geometry Cities from air - Photos
Photos Bangkok Get snow - Opens Snow Village
Stunning Summer Aerials from Around the World (PHOTOS)