Glencore trims down Kazzinc deal
TRADER GLENCORE has trimmed its ambitions to control Kazakh zinc producer Kazzinc, announcing a revised cash and shares agreement worth up to $1.4 billion, less than half the original deal, to raise its stake to just under 70 per cent.
The revised move – at a time when Glencore is in the final throes to take over miner Xstrata – values Kazzinc at a lower price and will involve less cash.
That could reassure credit ratings agencies which had pointed to the purchase as one where the acquisitive trader, with a rating of two notches above junk, could cut back on cash strain.
Glencore, the world’s largest diversified commodities trader, said at the time of its listing in May last year that it would raise its 50.7 per cent stake in Kazzinc, one of Glencore’s most substantial subsidiaries, to 93 per cent, spending $3.2 billion including $2.2 billion in cash.
The plan then had been to boost control of the producer but also to eventually list the gold assets, which together amount to the largest gold producer in Kazakhstan, separately. A listing, however, is unlikely to be imminent, however, analysts said.