Glencore’s Share Price Rises Following Fresh Refinancing Deals

on Jun 14, 2013
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Mining and commodities trading giant Glencore Xstrata (LON:GLEN) has signed three revolving loan facilities totalling $17.34 billion to replace credit lines obtained before last month’s merger of Glencore and Xstrata and provide working capital. The Glencore share price rose 2.45 percent to 313.61p as of 10:26 GMT today in London after the Switzerland-based company announced the loan deals.

**”Widespread support” from banks**
The resources conglomerate said in a statement this morning that it has signed three revolving credit agreements: a $5.92 billion 12-month loan, a $7.07 billion three-year loan and a $4.35 billion credit with a five-year maturity. The refinancing agreed by Glencore Xstrata is one of the biggest loan deals in Europe this year.

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The credit facilities were initially launched at $12 billion and closed substantially oversubscribed, raising in excess of $19 billion, “due to strong support from Glencore’s broad and deep group of relationship banks”.
A total of 80 banks have committed to the facilities, including 29 mandated lead arrangers and bookrunners. Santander, Barclays, Commerzbank, Societe Generale and the Royal Bank of Scotland were the active bookrunners.

Glencore’s Chief Financial Officer Steven Kalmin said in the statement: “The strong result of syndication and the competitive terms achieved under this transaction demonstrate the widespread support across the banking sector for the newly merged company.”
**NGOs Lash out at Glencore over Mining Project**
In a separate development, Glencore Xstrata has faced criticism over a planned mining project in the Philippines. In a report released in Zurich earlier this week, Swiss and German non-governmental organisations (NGOs) accused the Switzerland-based company of showing “insufficient respect for the rights of the affected population” in its plans for developing a copper and gold open-pit mine in the

Southeast Asian state, and called on the Swiss government to take action.
!m[Glencore Xstrata (LON:GLEN) ](/uploads/story/3082/thumbs/pic1_inline.jpg)
The $5.9 billion Tampakan Copper-Gold Project, currently under development on the Philippine island of Mindanao, will be one of the world’s largest open-pit mines that will produce an estimated 360,000 ounces of gold and 375,000 tonnes of copper annually. The mine is planned to start operaions in 2019. But according to a study conducted by the Institute for Development and Peace (INEF) and published in the NGOs’ report, the “human rights to self-determination of indigenous peoples, to food, water, health, life and physical integrity are at stake”.
Gelncore Xstrata has not yet issued an official comment to address the NGOs’ concerns.

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