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Glencore aims for $11 billion IPO

14 april 2011, 12:54
Swiss commodities giant Glencore plans to raise up to $11 billion from listings in London and Hong Kong, in what is set to be the biggest initial public offering this year, AFP reports.

The group is expected to sell 2.5-10 percent of the offering to Hong Kong retail investors, Dow Jones Newswires said, quoting a term sheet.

The report said Glencore, the world's largest commodities trader by revenue, will set an indicative price range for the shares around May 4.

The company will use around $5 billion of the proceeds for capital expenditure over the next three years and around $2.2 billion to increase its stake in Kazakh mining firm Kazzinc Ltd and reducing debt, Dow Jones said.

Glencore has said it was planning to float shares in a dual listing, with a primary listing on the London stock exchange and a secondary listing on the Hong Kong bourse. It is expected to announce details later Thursday.

The IPO is set to be the world's largest this year, doubling the $5.5 billion offering in Singapore of Hong Kong billionaire Li Ka-shing's Hutchison Port Holdings Trust last month.

Glencore deals with commodities including metals and minerals, energy and agricultural products. The group is involved in all stages of the supply chain -- from extraction to refining and supplying.

The firm posted a 40.7 percent jump in 2010 net profit to $3.8 billion, reflecting strong demand for metals and minerals.

Revenues were up 36.3 percent at $145 billion, said the group, which was founded in 1974.

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