Glencore Pivots From Disposals to Dividends as Stock Rallies – by Jesse Riseborough (Bloomberg News – November 29, 2016)

https://www.bloomberg.com/

What a difference a year makes. Glencore Plc fended off questions in 2015 about its survival as commodity prices hit new lows, and now there’s talk that the company’s turnaround plan has gone so well that it could be months away from paying dividends again. Surging coal and zinc prices, a rebounding stock price and shrinking debt pile made Glencore one of mining’s biggest success stories this year.

Chief Executive Officer Ivan Glasenberg, who will provide an update on corporate strategy on Thursday, spent the past year ticking off items outlined in a crisis-induced debt reduction plan, including a goal to sell $4 billion to $5 billion in assets. The market rewarded him for it, with the stock tripling in 2016 and clawing back almost all of last year’s losses.

Now, backed by a strong rebound in profits from its coal and zinc divisions, Glasenberg is in a position to pay back shareholders for supporting him through Glencore’s darkest days as a publicly traded company.

None more so than Harris Associates’ David Herro, who placed the biggest wager on a Glencore recovery. The firm invested more than $2 billion at a time when others like Lansdowne Partners, one of Europe’s largest hedge funds, were betting big on further declines.

“Job one is to continue to make sure that the balance sheet is strong and could withstand any kind of aggressive falls in commodity prices,” Herro, a portfolio manager at Chicago-based Harris, which is Glencore’s fourth-biggest shareholder with about a 5 percent stake, said in an interview with Bloomberg Television in London this month.

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