Glencore wins crucial vote of confidence

SHARES in Glencore raced to a three-month high yesterday after it won crucial backing from its bankers.

Investors in the troubled mining and commodities trading giant breathed a sigh of relief after 37 lenders agreed to refinance its £5.9bn credit facility.

Glencore shares climbed nearly 17pc but are still 77pc below the price they floated at in 2011.

Analysts at broker SP Angel commented: ‘Investors have been concerned that bank finance had dried up, but the environment is not like the banking crisis of 2008.’

Glencore’s deal with its banks, which sees it take on a new £5.4bn credit facility, came earlier than expected and was described as a ‘vote of confidence from the banking sector’ by Mike van Dulken, head of research at trading firm Accendo Markets.

The deal was part of the company’s plan to slash its debts by £9bn by the end of the year.

Last year it suspended its dividend and vowed to cut costs and shrink its £20bn debt mountain amid fears about its creditworthiness. Glencore chief executive Ivan Glasenberg has suffered heavy losses as the share price tumbled but his 8.42pc stake is worth around £1.5bn. The commodity price slump has hit all major mining stocks.

A slowdown in demand from China – the world’s biggest consumer of metals – has sent prices of products such as iron ore and copper tumbling.

On Tuesday Anglo American updated its plans to reduce debt, sell £3bn of mines and cut its workforce from more than 130,000 to 50,000.

Mining stocks were in favour yesterday on a stronger oil price and news that China will attempt measures to boost its economy.

Anglo American’s share price jumped 17.6pc or 70.1p to 468.05p and Glencore rose 17.05p to 120p.