• condensed by Lynda Kiernan

Field of Potential Buyers for Glencore Ag Business Narrowed

Global commodity trader, Glencore Plc, has narrowed down the field of bidders for the pending sale of a stake in its agricultural unit scheduled to be completed in the first half of 2016, according to Bloomberg.

The group, which has decided on the sale as part of a program to pay down $12 billion of its $30 billion debt, has reduced the bidders to include the sovereign wealth funds of Qatar, Singapore, and Abu Dhabi, the Saudi Agricultural and Livestock Co. (SALIC), and the Canada Pension Plan Investment Board (CPPIB), according to sources familiar with the ongoing negotiations.

Glencore’s agricultural business has been valued by Citigroup Inc. at $10.5 billion with earnings before interest, tax, depreciation, and amortization (EBITDA) of $1.21 billion in 2014 and $332 million in the first six months of 2015, reports Swissinfo.

The group has said in the past that it would also consider an initial public offering (IPO) for the business, and although it prefers to pursue the sale of a minority stake in the unit, it is still keeping the option for a possible IPO open, said sources.

As of December, Glencore stated that it was successful in saving $8.7 billion through its debt-reduction program, but that it was extending such actions in order to cut borrowings to $18 billion by the end of 2016.

The company, which is looking to raise up to $4 billion through the sale of assets, will be holding management presentations on the business by the end of this month.

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Lynda Kiernan is Editor with HighQuest Group Media and of the Oilseed & Grain News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@highquestgroup.com.

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