Glencore managers surprise industry by raising their bets in the company

Move surprises industry amid company woes

FOUR years after a stock market listing made them billionaires, and months after the last ban on them selling shares expired, most Glencore managers are still sticking with their boss Ivan Glasenberg – and preparing to invest more in the firm.

The loyalty comes as a surprise to many industry players, particularly in light of the company’s woes which forced it to suspend dividends this week and announce plans to sell new shares to cut its $30 billion (R406bn) debt pile.

Rivals and hedge funds had already long bet the managers – some of the world’s top traders like Alex Beard for oil and Tor Peterson for coal – would be unable to resist the temptation to cash out after decades of service for the commodities giant.

New equity issue

“I had been honestly thinking most guys would be somewhere like in the Bahamas by now. It is quite extraordinary that most of them are still around,” a senior executive at one of Glencore’s trading rivals said.

At the time of the $10bn London flotation in 2011, a possible exodus of management was a big concern among potential investors, so Glencore imposed bans – or lock-ups – on selling shares for stipulated periods after the listing.

The last of these expired in May, apart from those constraining the chief executive and finance chief – but not only have most of the directors held onto their shares, they plan to buy more in the new issue to prevent their stakes being diluted.

“We had calls from hedge funds recently asking if Alex or Tor or somebody else sold out. No one did. And everyone will be investing in a new equity issue,” a high-level source at Glencore said.

Plans for the $2.5bn issue were announced last week as the mining and trading firm acknowledged the severity of a commodity market slump, but the timing and shape of the issue have yet to be decided.

“What we said to shareholders is that we do not wish to be diluted. Any type of capital