Digging deep for Glencore shares

THE top brass at debt-laden Glencore put their hands in their pockets to the tune of £356m as it raised £1.62bn to stave off a credit downgrade.

Chief executive Ivan Glasenberg invested around £154m in the fund raising but will miss out on £130m of dividends after the payments were suspended.

Glencore has become the first major mining company to make a cash call in the face of the collapse in metal prices. It issued 1.3bn new shares – or nearly 10pc of the company – to help pay down up to a third of its £19bn debt pile amid the threat of a credit rating cut.

Glasenberg, and the eight other senior partners at Glencore who bought 22pc of the newly issued shares, were forced to put more cash in to retain their stakes in the mining and commodity giant.

Glencore’s head of zinc Daniel Mate and head of copper Telis Mistakidis spent £59m and £58.3m respectively. However the cost of buying new shares for the nine directors comes in at less than a quarter of the total dividends they have already received since floating the company, with Glasenberg receiving nearly £500m.

Glencore’s share price has been savaged by fears of a slowing Chinese economy which has led to the tumbling price of commodities. The shares have lost more than 75pc of their value since the float in 2011.

Plans for the cash call were announced last week alongside drastic cost cutting measures and the closure of two operations in Africa.

The new shares were placed at 125p a share, a discount to Tuesday’s closing price of 128p. Shares closed up 5pc or 6.65p to 134.7p yesterday.