Glencore Takes Initial Step Towards IPO

glencoreIn what is being seen as the company's first step towards becoming a public company and setting up its initial public offering, Glencore, the world's top ranked commodity trader, has issued up-to $2.2 Billion (1.4 Billion Pounds) in convertible bonds to its strategic investors across US, Singapore and China.

The initial floating of bonds, which values the Swiss firm at $35 Billion, has been taken up by First Reserve, a US private equity group which mainly focuses on natural resources, in addition to GIC, which is Singapore's sovereign wealth fund, American BlackRock and the Zijin Mining Group of China.

"This is a clear step towards an initial public offer. The mix of investors is the typical you expect in a pre-initial public offering operation", said a commodities banker.

According to a statement issued by the company the bonds which have been floated are convertible "into Glencore shares upon a qualifying IPO or upon other pre-determined qualifying events".

The impending IPO is being viewed as a major step in Glencore's development and is set to bring about huge windfall gains for the various company employees, as well as owners of the company. "As economic growth resumes, the outlook for most commodity markets is continuing to improve", Glencore said in a statement.