Glencore makes U-turn on stake sale

GLENCORE has hired advisers to sell a minority stake in its agricultural business in a deal that could value the whole division at £6.5bn.

Shares in the commodities and mining giant, which floated on the London stock market at 530p in 2011, fell to all-time lows yesterday. They have dipped below £1 for the first time this week and finished down 1.39p at 97.22p.

The company, based in Switzerland, has hired Citigroup and Credit Suisse to advise on a possible sale, according to Bloomberg.

It is said to be in talks with a number of sovereign wealth funds and Asian trading houses.

Ivan Glasenberg, the chief executive, has embarked on a drive to slash the company’s £20bn debt pile by more than £6bn. Measures include a £1.6bn share placing, spending cuts, suspending the dividend and a sale of assets.

A sale of a stake in the agricultural arm would represent a U-turn by Glencore, which until recently was saying it wanted to expand the business after buying Canadian grain trader Viterra in 2012. Glencore is one of the top two global traders of wheat.

Its shares have fallen by about 70pc in the past 12 months as commodity prices have tanked, largely as a result of lower demand from China, whose economic boom has stalled.

The company has been criticised by some shareholders for failing to give them pre-emption rights in its capital raising earlier this month. Critics say its moves to boost its balance sheet are inadequate.

Last night, Glencore declined to comment.