Glencore share price: Commodities giant arranges $1.3bn oil loan for Chad

on Jun 16, 2014
Updated: Apr 9, 2020
Listen, Monday, June 16: Anglo-Swiss commodities giant Glencore Xstrata (LON:GLEN) has been selected by Chad to finance its purchase of Chevron’s (NYSE:CVX) $1.3 billion oil assets, the African country’s oil ministry has revealed.

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Chevron, the US energy major, said on Friday that it had sold its stake in an oil concession and pipeline system in southern Chad, known as the Doba Project, to the country’s state-owned oil company, the Société des Hydrocarbures du Tchad (SHT).
Chevron did not disclose Glencore’s role in the deal. However, Chad’s oil ministry said in a statement: “For the financing, the Republic of Chad, after having sought the support of several lenders and studied their offers, has decided to retain Glencore Energy UK Ltd.” It further disclosed that the loan, backed by crude oil exports, will be repaid over a period of four years.

According to inside sources, cited by The Financial Times, Deutsche Bank, Natixis and Credit Agricole as well as regional development lenders were also participating in the deal.
Glencore is already present in Chad after it bought oil group Caracal Energy for $1.35 billion in April (Glencore share price: Mining giant snaps up Caracal Energy). The trading house first invested in the African country in 2012 when it paid about $300 million for a stake in several oilfields.

When contacted by Reuters, Glencore declined to comment on its latest activity in Chad.
**Company to buy back convertible bonds**
In a separate move, Glencore announced today that it would buy back the $2.3 billion five-percent convertible bonds due 2014.

The company said in a statement to the London Stock Exchange that it was targeting an aggregate principal amount of approximately $600 million for the repurchase, which it will finance through its balance sheet.
Glencore will pay an amount determined by a so-called modified Dutch auction procedure, with a minimum purchase price per bond of 108.50 percent of the principal amount of a bond, excluding accrued interest per bond of $2,361.11, it added in its statement today.

**Glencore share price rises**
Glencore’s share price has been trading in positive territory so far today. By 13:01 BST, the stock had gained 1.24 percent to 321.95p.
According to AnalystRatingNetwork data, two equity analysts rate the FTSE 100-listed commodities giant as a ‘sell’, seven give it a ‘hold’ rating and 13 are calling it a ‘buy’. The shares have a consensus rating of ‘buy’ and an average price target of 361.96p.
**As of 13:59 BST, buy Glencore shares at 321.60p.**
**As of 13:59 BST, sell Glencore shares at 321.50p.**


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