Glencore to accelerate debt cuts, capital expenditure – by David Stringer and Jesse Riseborough (Bloomberg News/ – December 10, 2015)

Glencore expanded its debt-reduction plan by pledging more asset sales and wider spending cuts as the Swiss miner and trader reacts to the deepening rout in commodities prices.

The company is seeking to trim its net debt to between $18 billion and $19 billion by the end of 2016, it said on Thursday in a statement. That’s less than the company said in September, when it promised to cut debt by about a third to about $20 billion. The shares rose the most in more than a month.

The world’s biggest miners are reeling from a slump in commodities prices that have cut profits and stretched balance sheets loaded with debt during a decade-long bull run.

This week, Anglo American pledged to dramatically overhaul its business and Freeport-McMoRan extended spending and production cutbacks to try to ride out the worst raw-materials rout since the global financial crisis in 2008.

“This update is better-than-expected, sufficiently detailed and provides a clear debt-reduction pathway and timeline,” Liam Fitzpatrick, an analyst at Credit Suisse Group in London, who recommends buying the shares, wrote in a note.

Glencore rose as much as 8.3% and was up 5.8% at 87.87 pence by 8:13am in London. The stock has dropped 70% in London this year, giving the Baar, Switzerland-based company a market value of about $19 billion.

It’s the second- worst performer in the UK’s benchmark stock index this year. Credit-default swaps insuring the company’s debt for five years surged more than fivefold since January.

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