BAAR, Switzerland, Sept. 7 (UPI) — Raw material producer and trader Glencore, aims to cut a $30 billion debt by a third by selling assets and new shares.
The Baar, Switzerland-based company posted its biggest weekly drop in London last week since going public in 2011.
On Monday, it it sought to sell approximately $2.5 billion in new shares and assetsworth nearly $2 billion. It will also hold off on dividend payments until further notice and reduce overall debt by nearly $10.2 billion.
The debt-reduction program announced Monday is a new direction for the company and its chief financial officer Steve Kalmin, who in August said the company would “walk and chew gum,” meaning it would protect its credit rating and still make dividend payments. Plans changed when investors expressed concern over a 56 percent drop in profit in August.
Alongside BHP Billiton Ltd. and Rio Tinto Group, Glencore has lost well over half of its market value this year as commodity prices have fallen to their lowest point in 16 years. Standard & Poor says the company’s future may become brighter as weaker-than-expected Chinese growth affects copper and aluminum prices.
Chief Glencore executive Ivan Glasenberg said the company still retains strong liquidity, positive operational free cash flow and modest near-term maturities. He also says its credit ratings were recently affirmed and the company lacks debt covenants.