LONDON (BLOOMBERG) - Glencore Plc finalized a US$7.7 billion (S$10.6 billion) loan from almost 60 banks as the commodity trader shores up its balance sheet following a raw-materials downturn.
Lenders offered more than US$10 billion, according to a person familiar with the matter who asked not to be identified because they're not authorized to speak publicly. The loan replaces an US$8.45 billion revolving credit facility, according to an earlier statement.
"This is a signal that the market is open," said Paul Gait, a London-based senior analyst at Sanford C. Bernstein & Co., a research arm of AllianceBernstein Holding LP, which oversees US$479 billion of assets. "People were concerned that they wouldn't be able to refinance their debt."
Chief Executive Officer Ivan Glasenberg has scrapped dividends, raised US$2.5 billion in a stock offering and sold off assets to allay concerns about Glencore's borrowings amid lower commodity prices. He intends to cut net debt to as low as US$17 billion this year, from US$25.9 billion at the end of 2015. The debt plan and a commodity pickup have fueled a 42 per cent surge in Glencore stock this year. That's after a 70 per cent rout in 2015. The shares were little changed at 128 pence in London on Tuesday, or about a quarter of the 2011 initial public offering price.
The Baar, Switzerland-based company is selling two copper mines and is studying options for a Kazakh gold project. It may also sell another 9.9 per cent of an agriculture unit, following on a 40 percent stake sale agreed to earlier this year.
Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a senior independent non-executive director at Glencore.