LONDON/JOHANNESBURG, Sept 29 (Reuters) – Debt-laden Glencore may unload all its agricultural assets instead of just a stake, analysts said, but the commodity group is unlikely to expand its divestment programme to include top mines.
Selling assets is one prong of a wider strategy by the Swiss-based trader and miner to cut about a third of its $30 billion debt and to regain the trust of investors after its shares tumbled by about three quarters this year to record lows amid weak global commodity prices.
On Tuesday, Glencore shares bounced and the group said it was “operationally and financially robust”.
Earlier this month, Glencore outlined a plan to reap $2 billion for its debt reduction plan by selling a minority stake in its agricultural business and also the rights to precious metals extracted from its copper and zinc mines, among other possible asset sales.
On Monday, Glencore provided a taste of what might come with the $8 million sale of a Brazilian nickel project.
“If there’s an interesting bid on the table, Glencore may consider selling all of the agriculture assets,” said UBS analyst Myles Allsop.
“These guys are very pragmatic – if they can raise $10-$12 billion from the sale of ags and address all the balance sheet concerns, they would seriously consider it.”
Glencore declined to comment on the possibility of selling its entire agriculture business, but a source close to the company said that if it received an attractive bid, it would have to look at it.
Glencore’s agricultural division, which focuses on grains, oilseeds, cotton and sugar, expanded three years ago with the C$6.1 billion takeover of Viterra, Canada’s biggest grain handler.
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