A few investors, including Investment Association, have criticised the way in which Glencore recently raised $2.5 billion, saying that the miner had breached shareholder protection principles.
Government data showed China’s crucial industrial companies saw profits fall 8.8 per cent in August from a year ago – hit by August’s shock yuan devaluation, weak demand and plunging share prices.
Glencore shares fell to a record low on Monday over concerns it was not doing enough to cut its debt to withstand a prolonged fall in global metals prices.
The shares gained a few respite from the battering, rising 6.1p to 74.75p, but have still lost three quarters of their value this year. Fast forward 12 months and its shares have gone into freefall, as plummeting commodity prices take their toll on its debt-soaked balance sheet.
The firm is on the verge of joining the dreaded “90% club” – companies worth just a tenth of their original float value – following their 530p float in 2011.
As you can see, Glencore still has a lot of ground to make up.
US-based hedge fund Passport Capital is in line for £87 million.
Alcoa announced on Monday it will break itself in two, separating a faster growing plane and vehicle parts business from traditional alumina and aluminum production as shareholders seek higher returns amid a commodity slump.
I’d argue that the company is more of a tax evasion scheme disguised as a mining company but what’s inarguable is that it’s saddled with a massive debt load and that Glencore employs about 18,000 Australians in coal, copper, cotton, grain and oilseeds, nickel and zinc.
Australia’s mining stocks have been slaughtered in morning trading after miner-cum-trader Glencore (GLEN.UK) tumbled 30% in London trading, with BHP Billiton (BHP.AU) and Rio Tinto (RIO.AU) down 6% and 5%, respectively.