Glencore Plc will buy back as much as $1 billion (R13.7 billion) of its shares, a move that may soothe investor concerns after the world’s top commodity trader was hit by a U.S. Department of Justice probe earlier this week.
The buyback program will start Thursday and last through year-end, the Swiss miner and trader said in a statement. Glencore shares rose as much as 4.7 percent, the most since April.
The announcement comes two days after U.S. authorities demandeddocuments relating to possible corruption and money laundering regarding Glencore’s business in Nigeria, the Democratic Republic of Congo and Venezuela over the past decade. That wiped about $5 billion off Glencore’s market value on Tuesday, marking the latest twist in a tumultuous year for the company.
Glencore has faced challenges linked to its business in the Congo, where it operates giant copper and cobalt mines. It’s also facing the possibility of a bribery investigation by U.K. prosecutors over its work with Israeli billionaire Dan Gertler, a close friend of Congo President Joseph Kabila, people familiar with the matter have said.
The share buyback “does not seem a coincidence and, in our view, suggests management also believes the recent price moves are extreme,” Barclays Plc said Thursday.