Wednesday, May 4, 2011

Glencore chief’s stake valued at $9.6bn

Ivan Glasenberg

By Javier Blas, Commodities Editor
Financial Times

Published: May 4 2011 15:06 | Last updated: May 4 2011 15:06

Ivan Glasenberg will control a 15.8 per cent stake in Glencore worth around $9.64bn after the company’s initial public offering, making the chief executive of the world’s largest commodities trading house one of the richest men in Europe.

The initial public offering, which values Glencore at $48bn-$58bn currently, will trigger large paper gains for the Switzerland-based group’s 485 partners. Following the issue of $7.9bn of new shares, the enlarged company will have a market capitalisation of $61bn at the mid-point of the flotation range.

Mr Glasenberg, who ahead of the IPO controlled a 18.1 per cent stake in the company, vehemently denied in an interview with the Financial Times last month that the offering showed that staff were cashing in at the top of the commodities cycle, saying that top employees would be locked in for up to five years.

“We will continue to be major shareholders of this company, and we are going to run this company to make maximum profits and maximum returns for our investors – including ourselves,” he said.

Mr Glasenberg said he would not sell shares as long as he worked at Glencore and added: “I have not intention to retire anytime soon.”

The 1,600-plus IPO prospectus reveals for the first time the ownership of the company. Apart from Mr Glasenberg, who is by far the group’s largest investor, other top shareholders among Glencore partners include Daniel Mate and Telis Mistakidis, heads of the copper and lead departments. They will each control a 6 per cent stake worth $3.7bn.

Tor Peterson, head of coal, will control a 5.3 per cent stake, worth $3.2bn; Alex Beard, head of oil, will own 4.6 per cent ($2.8bn); and Steven Kalmin, chief financial officer will hold 1 per cent ($610m). Other shareholders have lower stakes, which Glencore did not disclose.

The flotation marks a radical transformation of Glencore, which since it was founded in 1974 has been a private partnership. The IPO will move Glencore, run from a nondescript Swiss building in Baar, a sleepy town south of Zurich, further from its origins under Marc Rich, the oil trader who was indicted for tax evasion in the US and pardoned by President Bill Clinton on his last day in the White House.

Mr Rich sold the company to management in 1993-94 for about $600m.

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