Wednesday, 13 April 2011 - 20:00
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Listing of major mining company Glencore
Commodity prices have moved up very steeply over the last two years. At the same time diversified miners that have access to these commodities have escalated in value. It i at these times that investment bankers encourage unlisted companies to take their companies public in order to maximise the value raised.
Essentially an IPO or initial public offering is a partial sale of the business from existing shareholders to institutional and private demand. When investment bankers gauge that demand from institutional investors will be strong, they encourage specific private companies to come to the market.
A potentially large new IPO was announced last week - Swiss based Glencore is looking to float some of its equity via an IPO. The indicative numbers are that Glencore will be valued at around $60 billion and will look to list around 20% of its equity – i.e. raise some $12 billion.
Glencore describes itself as “one of the world's leading integrated producers and marketers of commodities that industries around the world need. Glencore has worldwide activities in the production, sourcing, processing, refining, transporting, storage, financing and supply of metals and minerals, energy products and agricultural products.”
In an article in the FT, the CEO of Glencore, Ivan Glasenberg said ““The interest from the cornerstones was a lot stronger than we envisaged. Markets are in our favor, too. We have a strong commodities market.”
Clearly the current market for this type of business has moved to that of a sellers’ market, which is exactly why Glencore management are looking to capitalise on the current demand, raising the maximum amount of cash for giving up the least amount of shares.
Glencore was founded in 1974, originally as the notorious Marc Rich and Co in Switzerland, headed by commodity trader Marc Rich.
Now valued at around $60 billion it is one of the world’s largest privately held companies and so the IPO will attract a lot of attention. Current shareholders are management and employees. It has its headquarters in Switzerland and has marketing operations in 50 offices across 40 countries.
Its 3 main business groups are metals and minerals (aluminium, ferroalloys, cobalt and zinc etc), energy (oil and coal), and agriculture products (grains, oils, cotton).
In 2010 the company reported turnover of $145 billion, net income of $3,8 billion and total assets of $79,8 billion.
Some of the world’s largest mining companies include
• BHP Billiton
• Rio Tinto
• Vale SA
• Anglo American
Glencore has a 34,5% stake in London listed Xstrata. This original Swiss company was transformed from 2001 when new management took over, headed by South African, Mick Davis. At that stage it had a market capitalisation of just$500million. Today with a market capitalisation of GBP45 billion, it describes itself as the world’s largest producer of export thermal coal, the largest producer of ferrochrome, and one of the top five producers of coking or metallurgical coal (used in steel making). Glencore CEO, also a South African, Glasenberg sits on the board of Xstrata.
Chart of copper
So time will only tell when the top of the current cycle will be for commodity prices. A major listing like this – if it comes through – gives some sign.
Ian de Lange
021 9144 966
Wed, 13 Apr 2011
Gold rose in Europe on
Wednesday, recovering after its biggest one-day drop in nearly a
month as the dollar retreated amid expectations the. . .
Australian stocks recouped
early losses and ended 0.3 percent higher Wednesday, with
investors taking profits on miners, following weak production
reports, and switching into. . .
Tokyo shares nudged higher on
Wednesday, recouping some of the previous day's losses, but the
futures-led upward move on thin volume suggested the. . .
Gold bounced higher on
Wednesday after posting its biggest decline in a month in the
previous session, shrugging off falls in exchange traded. . .
Shareholders are referred to the voluntary business update published by Altron on SENS on 10 December 2010. Pursuant thereto, Altron's sub-holding operations have experienced the following trading conditions:
* Bytes has performed well over the financial year, exceeding expectations and achieving. . .
Aquarius Platinum Ltd ("Aquarius" or the "company") announced the acquisition of platinum group metal ("PGM") mineral rights by way of the purchase of Afarak Platinum (Pty) Ltd ("Afarak"), a private company incorporated in South Africa (the "transaction"), following the fulfilment of. . .
Revenue for the interim period ended 28 February 2011 improved to R680 million (R629.1 million) and gross profit jumped to R172.5 million (R165.3 million). However, earnings before interest, tax, depreciation and amortisation ("EBITDA) dropped to R76.5 million (R79.1 million). Profit for. . .
Income more than doubled to R73.6 million (R22.7 million). Net attributable profit surged to R355 million (R179.6 million). However, headline earnings fell to 34.5cps (43.9cps).
Paladin's investments in the construction and manufacturing sectors in particular did not escape the aftermath of. . .
World Markets (Spot Prices)
|JSE Top 40||17:00||29140.53||115.37||0.40%|
|JSE Indust 25||17:00||26733.04||103.73||0.39%|
|Rand / Dollar||19:59||6.8086||0.0716||1.06%|
|Rand / Pound||19:55||11.0392||0.1146||1.05%|
|Rand / Euro||19:55||9.8391||0.0814||0.83%|
|Rand / NZD||19:58||5.3525||0.0764||1.45%|
|Rand / AUD||19:55||7.1495||0.1095||1.56%|
|Yen / Dollar||19:58||83.7700||0.2000||0.24%|
|Euro / Dollar||19:55||0.6919||0.0015||0.22%|
|Dollar / Euro||19:58||1.4442||-0.0035||-0.24%|
|Pound / Dollar||19:50||0.6150||0.0001||0.02%|
Click here for the Sharenet Spot Price page
The JSE Today
|Index Name||RP||Move||% Move|
|Financial & Ind. 30||30,153.78||52.72||0.18%|
|Oil & Gas ||28,957.75||602.15||2.12%|
|Oil & Gas Producers ||15,570.05||323.77||2.12%|
|Basic Materials ||31,949.94||111.71||0.35%|
|Forestry & Paper ||14,109.69||-18.81||-0.13%|
|Industrial Metals ||30,720.64||-94.84||-0.31%|
|General Industrials ||75,539.79||-159.24||-0.21%|
|Consumer Goods ||26,428.32||370.14||1.42%|
|Automobiles & Parts ||3,057.02||11.32||0.37%|
|Health Care ||31,628.19||13.99||0.04%|
|Food Producers ||47,453.32||284.76||0.60%|
|Index Name||RP||Move||% Move|
|Personal Goods ||387.82||4.20||1.09%|
|Consumer Services ||52,138.41||-366.57||-0.70%|
|General Retailers ||40,909.27||-251.05||-0.61%|
|Travel & Leisure ||3,622.71||16.94||0.47%|
|Support Services ||2,434.25||-6.18||-0.25%|
|Non-life Insurance ||29,622.69||-809.92||-2.66%|
|Life Insurance ||16,297.61||5.31||0.03%|
|General Financial ||2,266.54||-9.76||-0.43%|
|SHARIAH TOP40 ||3,307.35||16||0.48%|
|FTSE/JSE SHARIAH ALL||3,358.82||15||0.46%|
|FTSE JSE Fledgling ||4,529.86||2||0.04%|
|FTSE/JSE Alt X ||1,013.20||21||2.07%|
|SA LISTED PROPERTY ||372.02||-0.22%|
|CAPPED PROPERTY ||309.70||-0.07%|
|FTSE/JSE RAFI 40||6,769.75||15||0.22%|
|Capped Top 40||15,133.22||55||0.37%|
|Capped All Share||16,253.67||54||0.33%|
Click here for the Sharenet Index Summary page
Latest Consensus Changes**
|REI||REINET INVESTMENTS SCA||HOLD||11 Apr|
|ADH||ADVTECH LIMITED||BUY||07 Apr|
|MUR||MURRAY AND ROBERTS HOLDIN...||HOLD||06 Apr|
|AEG||AVENG LIMITED||BUY||06 Apr|
|WBO||WILSON BAYLY HOLMES-OVCON...||BUY||06 Apr||
|Expected||Company Name||Fin. Date|
|14 Apr 2011||CLICKS||February 2011 (Interim)|
|14 Apr 2011||IFCATECH||December 2010 (Final)|
|14 Apr 2011||IQUAD||February 2011 (Final)|
|18 Apr 2011||B-W||February 2011 (Interim)|
|18 Apr 2011||B-WP||February 2011 (Interim)|
|NAIL -N-||11-04-05||11-04-19||11-05-03||R 0.1760||
|GROUP 5||11-02-14||11-04-08||11-04-18||R 0.5200|
|MRF||Merafe Resources Ltd||14/04/2011||Confirmed|
|CIL||Consolidated Infrastructure Group Ltd||15/04/2011||Confirmed|
|IDE||Ideco Group Ltd||19/04/2011||Confirmed|
|ZSA||Zurich Insurance Company South Africa Lt...||20/04/2011||Confirmed||
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