Investors on tenterhooks to see Glencore’s Xstrata plan

GLENCORE will be forced to disclose whether it has imminent plans to merge with FTSE 100 miner Xstrata in its float prospectus, due to be released in the first week of May.

UK listing law requires companies to provide a summary of “all material contracts” with external parties that could substantially affect their financial position. That means Glencore will have to declare if it has advanced plans to pursue a merger with Xstrata, of which it owns 34 per cent, in the next quarter.

The commodities trader will also need to update investors on the status of plans to spin off the gold unit of Kazakh miner Kazzinc, of which it currently owns 50.7 per cent.

“They’ll have to say something on both Xstrata and the Kazakh gold spin-off,” said a source.

Glencore said in its intention to float document that it will use some proceeds from its float to increase its stake in Kazzinc to 93 per cent, with an option to buy 6.4 per cent more if it manages to float Kazzinc’s gold assets.

In 2010, Glencore announced plans to float the assets “during the course of 2011” in a deal that aims to raise some $600m (£364m).