Glencore pricing values firm at about $61-billion

Commodities giant Glencore International said on Wednesday that its partial share float later this month could value the company at $61-billion, making it one of the biggest initial public offerings in recent years.

The Swiss-based company aims to sell part of its shares for between £4,80 to £5,80 ($8 to $9,67) on the London Stock Exchange starting May 24, catapulting it straight into the FTSE 100 on the first day of trading. A secondary floatation is planned in Hong Kong on May 25.

Glencore would raise about $10-billion from the initial public offering.

The money will be used to fund its expansion, such as buying mines and farmlands, and increasing its stake in Kazakh zinc producer JSC Kazzinc.

Analysts have also suggested that Glencore might seek to take over Anglo-Swiss mining company Xstrata, in which it already holds a 34,5% stake.

Almost a third of the shares available will go to so-called cornerstone investors, the company said.

“Today we are able to announce one of the largest cornerstone investor participations ever achieved for an IPO,” chief executive Ivan Glasenberg said in a statement.

He said the company looked forward to welcoming new shareholders “as long-term partners in our growth”. Glencore has been at pains to stress to investors that current shareholders, said to be some 500 senior employees, will be prevented from cashing in their shares for several years.

Glencore reported sales of $145-billion in 2010. For many years the privately held company, founded in 1974, was considered the silent giant behind much of the world’s trade in raw materials.

Based in the small Swiss town of Baar, it extracts, grows, buys, ships and sells many of the world’s staple goods such as coal, copper and corn. It also controls about 3% of the global oil trade—a large share in a highly fragmented market.

The company made a net profit of $3,8-billion last year, a 41% increase on 2009.—Sapa-AP