Glencore execs hit the jackpot

GLENCORE executives, who controlled about a third of the commodity trader at its $10 billion (R119bn) initial public offering (IPO) four years ago, can sell their entire holdings from next week as the last of a series of staggered lock-ups roll-off.

Glencore is listed on the JSE. The company’s share price fell 3.07 percent to close at R53.60 yesterday.

The final tranche of locked-up employee-owned shares, diluted by Glencore’s $29bn takeover of Xstrata two years ago, will be released next Wednesday. The expiry of lock-ups in high-profile IPOs like Goldman Sachs Group in 1999 and more recently Facebook has sparked selling that trimmed the share price.

Any appetite to sell Glencore stock immediately will be tempered by weak commodity prices, Swiss capital gains tax and a 43 percent slump in the shares since the IPO.

Though chief executive Ivan Glasenberg has committed to holding his shares while at the Swiss firm, there has been speculation others, including those minted as billionaires by the IPO, might be tempted to cash in.

“With the senior execs that’s always been seen as the risk,” Paul Gait, a mining analyst at Sanford C Bernstein, said. “These guys are now fabulously wealthy so don’t they just monetise their positions and sail off into the sunset? So far it doesn’t seem to have been the case.”

Four top executives holding 5.9 percent of Glencore’s capital at the time of the IPO have since left the Swiss company, according to estimates compiled by Bloomberg from public records. It is unclear if any have sold stock as only executives holding stakes larger than 1 percent are required to declare their ownership or the sale of shares.