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Glencore to pay $3.2 billion to increase its stake in KazZinc

14 may 2011, 13:44
Swiss Glencore will pay $3.2 billion to increase its stake in KazZinc from 50.7% to 93%, Interfax-Kazakhstan reports.

A part of this deal - $1 billion dollars - will be paid with Glencore's stock which the seller will receive at the Glencore IPO subscription price. The remaining amount will be paid to Kazakhstan investment fund Verny Capital in several tranches out of a bonded loan from October to December 2011.

Verny Capital is reported to be connected with Kazakh billioneer Bulat Utemuratov. Bulat Utemuratov is also one of the seven shareholders of Glencore.

The 6.4% that will ramain in the hands of the Kazakh partner can later be bought by Glencore under an option which will depend on several issues, including the IPO of Kazzinc's gold assets.

Glencore is planning to spend another $834 million raised during the IPO to finance Kazzinc's capital investments program. Kazzinc owns the biggest Kazakhstan gold mine Altyntau. Glencore bought its initial stake in Kazzinc in 1997.

Swiss Commodities giant Glencore said it aims to raise up to HK$2.47 billion ($318 million) in the Hong Kong retail offering part of its IPO later this month.

Earlier Tengrinews English reported citing AFP that the firm is looking to generate up to $11 billion in a dual listing in London and Hong Kong, which will be the planet's largest initial public offering this year.

Glencore said it will sell 31.25 million shares in the Hong Kong offer in an indicative price range of HK$61.24 and HK$79.18.

The Hong Kong retail offer represents 2.5 percent of the total sale. The remainder will be sold in London.

Glencore, the world's biggest commodities trader by revenue -- $145 billion in 2010 -- has said that if the IPO is over-subscribed, it could sell more shares, sending the listing to about $12 billion.

It has already secured $3.1 billion from so-called cornerstone investors, including sovereign wealth funds in Singapore and Abu Dhabi, asset managers and private banks, according to media reports.

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