Glencore's share price closed 5.2 per cent higher yesterday, after a £1.6bn share placing reassured investors that the debt-struck resources giant could turn around its fortunes.
The FTSE 100 commodities trader and miner rallied to 134.7p per share, having plummeted to an all-time low of 118.10p on Tuesday, due to market jitters about Glencore’s unwieldy debt pile during the seemingly never-ending commodities rout.
Glencore, which announced plans for a share sale last week as part of a $10.2bn debt reduction package, confirmed the placing to the market after market close on Tuesday after the turbulent day of trading. It announced its completion yesterday morning.
“That’s the uncertainty out of the way. The share placing preserves the company before the commodities recovery,” Marc Elliott, analyst at Investec, told City A.M..
Senior executives bought over 20 per cent of the shares, with chief executive Ivan Glasenberg spending £138m.
Glencore has been the worst performer on the FTSE 100 this year, due to its high debt levels and its high exposure to commodities such as copper and coal, which both hit six-year lows last month due to the slowdown in growth in China, the largest consumer.