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Glencore in multi-billion dollar flotation

business Updated: Apr 15, 2011 22:37 IST
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Commodities trader Glencore has launched its eagerly awaited flotation, which will turn hundreds of its employees into multimillionaires. The initial public offering (IPO) will value Glencore at about $60 billion, which could make it the biggest float ever seen in London. It plans to raise $9-11 billion by selling 15%-20% of its share capital.

Glencore, which has its headquarters in Switzerland, is the world’s biggest commodities trader, buying and selling metal, sugar, wheat and oil. It is also the largest shipper of coal around the world. The company is owned by its 485 traders, who will receive average payouts of more than $100 million each through the flotation.

Glencore also announced that Tony Hayward, the former BP chief executive who quit the oil giant after the Deepwater Horizon disaster, is joining its board as its senior independent director. However the company has still not appointed a chairman, saying only that it was “working through the final process” of choosing a suitable figure.

Simon Murray, the Hong Kong-based businessman who has previously served on the boards of Vodafone and General Electric, revealed last weekend he was in the running, saying he would not be daunted by the challenge of chairing such a large company.

“This is very exciting, but you are talking to someone who has been chased by a leopard,” said the former French Legionnaire.

Glencore’s value has rocketed in recent years, driven by the rising value of raw materials. Some analysts, though, have suggested that its flotation may coincide with the petering out of the commodities boom.

The FTSE Group has agreed to add Glencore to its FTSE 100 blue-chip index on the day its shares start trading.

Glencore is also taking a secondary listing on the Hong Kong exchange.