FIVE directors of Glencore, the world’s biggest commodities trader, will be turned into paper billionaires overnight when the firm floats on the London and Hong Kong Stock Exchanges in two weeks.
Glencore’s hotly anticipated 1,600-page prospectus was unveiled yesterday, revealing for the first time the true extent of the fortunes amassed by its biggest players.
Chief executive Ivan Glasenberg owns 15.8 per cent of the company, which at its intended valuation of £36.5bn or $60.1bn, amounts to a staggering $9.5bn in shares.
Other directors Daniel Francisco Maté Badenes and Aristotelis Mistakidis will each own $3.61bn or six per cent; Tor Peterson will own $3.18bn or 5.3 per cent; and Alex Beard will boast a holding worth $2.77bn or 4.6 per cent. Chief financial officer Steve Kalmin will be a relative pauper by comparison, with just $602m, or one per cent, in shares.
Meanwhile, Glencore’s current partners will be allowed to cash in four per cent of their shares, amounting to $2.4bn, but the 485 partners will be forced to hold the rest of their stock for a minimum of six months. The company’s top executives will be locked in for five years.
In total, Glencore’s partners and directors of the company will still own around 83.6 per cent of the trader after the float, but the shift in ownership structure from a partnership to a public company will be one of the most dramatic changes in its 37-year history.
The firm’s prospectus highlights the transition as a key risk: “Glencore’s ability to attract, retain and compensate key employees may be impacted by its transition to a public company… This cultural change could result in certain key employees, whether skilled marketers, or otherwise, leaving.”
Investors have pinpointed the risk of losing top traders as a key concern. Olivetree Securities mining analyst Christian Georges said: “Once you give them a small fortune in cash and shares, they’ll be busy managing that.”
But despite the risks, the firm has signed up an impressive roster of 12 cornerstone investors, including BlackRock, Fidelity and the sovereign wealth funds of Abu Dhabi and Singapore.