Glencore shares to start trading in Hong Kong
Shares in commodities giant Glencore were set to start trading in Hong Kong Wednesday, a day after the world's biggest initial public offering this year drew a tepid response on its London debut.
Switzerland-based Glencore, the world's biggest commodities trader by revenue with $145 billion in 2010, has raised about $10 billion in a dual listing in London and Hong Kong, valuing the business at nearly $60 billion.
Trading on the Hong Kong bourse was scheduled to begin Wednesday morning, after shares in London sank to 525 pence ($8.49) at close on Tuesday, or 0.84 percent below its IPO price of 530 pence each.
The float had been among the most anticipated of the year, allowing investors to tap the surging commodities market driven by demand from Asia, particularly China and India, for resources to power their economies.
The commodities behemoth has said it had already secured $3.1 billion from so-called cornerstone investors, including sovereign wealth funds in Singapore and Abu Dhabi, who have subscribed to 31 percent of the shares on offer.
The firm has said a secondary listing in Hong Kong will allow it to build a "long-term mutually beneficial relationships" with the city's investors, and enable it to draw on demand from resource-hungry Asian markets.
Glencore is selling 31.25 million shares in the Hong Kong offer at a HK$66.53 ($8.55) per share. The Hong Kong retail offer represents 2.5 percent of the total sale, while the remainder was sold in London.
It plans to use funds raised by the listing to pay down debt, boost its stake in Kazzinc, a zinc producer with core operations in eastern Kazakhstan, and finance other projects to expand its business.
Ratings agency Moody's said the move would improve the group's ability to raise funds, giving it access to other forms of financing for future acquisitions.
Founded in April 1974 by trader Marc Rich, Glencore operated initially out of an apartment in central Switzerland's Zug canton before quickly emerging as a major player in commodities trading.
From metals, minerals and crude oil, the group moved into agricultural goods and started in the late 1980s to expand to owning mines.
© 2011 AFP