Glencore becomes top shareholder in Australia’s Atlas Iron via debt-to-equity deal – by James Regan (Reuters U.S. – May 9, 2016)

http://www.reuters.com/

Glencore has emerged as the top shareholder of embattled Australian iron ore miner Atlas Iron after a debt-to-equity transaction, giving the global mining and trading company its only direct exposure to production of the steelmaking ingredient.

Glencore has acted as an intermediary in buying and selling iron ore for third parties since 2008 but has mostly avoided, either by design or circumstances, the production side of the sector, which is dominated by Vale, Rio Tinto and BHP Billiton.

Glencore subsidiary Maru Sky earlier this year acquired a portion of Atlas debt as the small Australian miner negotiated with creditors to fend off collapse brought on by weak iron ore prices.

Atlas told the Australian Securities Exchange that Maru Sky had converted its debt ownership for 8.47 percent in equity, making it the single biggest shareholder. The next biggest is Commonwealth Bank of Australia with 6.36 percent.

Glencore in a statement emailed to Reuters said it did not produce any iron ore on its own, but holds rights to sell a portion of Atlas production under a supply contract.

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