Companies, page 15

Glencore’s stock rebounds as it fights last week’s equity market rout

THE sovereign wealth fund of Singapore is among investors that have expressed interest in buying a minority stake in Glencore’s agriculture business, according to two people who are familiar with the conversations.

Others involved in preliminary negotiations included Japanese trading houses, such as Mitsui, and at least one Canadian pension fund, said the same people, who asked not to be identified because the matter was confidential.

Citigroup, one of the banks hired to run the sale alongside Credit Suisse Group, said last week that the whole business could be worth as much as $10.5 billion (R145bn).

Glencore is seeking to sell a minority stake in the unit, which deals in commodities from wheat to cotton, soya beans to sugar.

As part of negotiations with potential buyers, the Swissbased commodities trader was considering a plan that would carve out its agriculture business as a stand-alone company with its own capital structure, incorporating the unit in Singapore, the same people said.

Under the island state’s rules, commodity trading houses can benefit from tax rates as low as 5 percent.

A Glencore spokesman declined to comment as did a spokeswoman for Government of Singapore Investment.

A Mitsui spokesman said the company was “aware of Glencore’s plan to sell certain businesses, but we have not come to a decision at the present (moment)”.

The negotiations come as Glencore fights an equity market rout that has eroded more than 80 percent of its market value since its 2011 initial public offering.

After plunging nearly 30 percent last Monday, Glencore shares have regained most of their losses and were trading at 91.6 pence (R19) on Friday.

The company’s sale of the agriculture business is part of a debt cutting programme. – Bloomberg