The sale was priced at 125 pence a share, the company said on Wednesday. If the issue had happened when the stock was trading lower, Glencore would have been forced to issue more than 9.99 percent in order to meet its $2.5 billion target, which would have slowed and complicated the process.
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Glencore said the moves were created to protect its balance sheet amid market uncertainty for commodities, and it comes after recent shareholder concern over market speculation about the company’s debt position.
The placing forms part of a series of measures unveiled by Glencore to cut its $29.5bn debt pile by one-third after its highly-prized triple B debt rating came under threat from the rating agency Standard and Poor’s. The majority of those shares will be sold via accelerated bookbuild, with the remaining 22 percent taken up by management, it said in a statement. Glencore will also sell assets and cut capital spending in a bid to lower the debt. The new shares will be allowed to trade on September 21.
Switzerland-based Glencore suspended trading of its shares in Hong Kong and London on Wednesday.
Copper dropped to a more than six-year low last month. Its shares have fallen almost 60 per cent since the beginning of the year and more than three quarters since its London share listing in 2011. The rest of the United Kingdom mining sector also fell, with the FTSE 350 mining index down 1.4% and other large miners such as Rio Tinto PLC and BHP Billiton PLC down 1.3% and 1.4% respectively.
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The benchmark thermal coal prices in South Africa and the Netherlands were hovering at $US51.95 a metric tonne and $US50.90 a tonne respectively on Tuesday, a multi-year low since the onset of the financial crisis in 2008.
