A plunge in prices of oil and metal and mineral commodities pushed Glencore
Zurich - AFP
Swiss commodities trading and mining giant Glencore said Thursday it had sold another stake in its agriculture business and would shift $3.6 billion in debt to the subsidiary.
The sale of 9.99 percent in Glencore Agri for $624.9 million in cash to British Columbia Investment Management Corporation follows the April sale of 40.0 percent to Canada Pension Plan Investment Board for $2.5 billion.
Glencore said that at the closing of the transaction, following regulatory approvals and other conditions, some $3.6 billion of Glencore Agri's debt that it had been carried by the parent company would be transferred to the agriculture subsidiary.
The funds from the sale of the 49.9 percent stake in Glencore Agri, plus a smaller transaction, means the company has reached $3.2 billion out of its target $4-5 billion in asset disposals the year to pay down its debt.
A plunge in prices of oil and metal and mineral commodities pushed Glencore last September to undertake drastic efforts to avoid collapsing under debt that then stood at some $30 billion.
In addition to selling off assets, it shuttered production at a number of mines and scrapped dividend payments to investors, helping to reduce debt to just under $26 billion by the end of the year.