Glencore to divest Lonmin stake to shareholders

Published Feb 11, 2015

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Johannesburg - Glencore PLC, the mining and commodities trading company headed by billionaire Ivan Glasenberg, said it’s planning to distribute its 23.9-percent holding in platinum producer Lonmin PLC to its own shareholders.

“As we do not trade platinum and have no special insight into the market, we believe that it is better to leave to our shareholders the decision as to how to manage the Lonmin shares,” Glasenberg said in a statement Wednesday.

Shares in Lonmin, the world’s third-biggest platinum producer, slumped 8.3 percent, the biggest one-day drop since December 1, to R28.56 by 9.53am in Johannesburg. Glencore’s stake is worth about $343-million. Glencore advanced 2.3 percent in Johannesburg trading.

The Swiss commodities supplier plans to complete the divestment of the stake, acquired in the 2013 takeover of Xstrata PLC, in the first half of this year. Since completing the $29-billion all-share deal, Glencore has repeatedly said the Lonmin holding was a “non-core asset”.

It’s estimated to be worth 3 cents per Glencore share and the decision to distribute won’t affect the company’s “approach towards its annual cash distribution consideration”, it said.

Lonmin is a producer of platinum in South Africa. Its Marikana mine was the site of some of the deadliest labour unrest since the end of apartheid during strikes in 2012.

Glencore’s decision to divest its holding is a “constructive way forward”, Lonmin said in a statement.

Separately, Baar, Switzerland-based Glencore said it’s cutting its 2015 spending in response to plunging metal prices. Expenditure this year will decline to a range of $6.5-billion to $6.8-billion from an earlier target of $7.9-billion.

Bloomberg

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