GENEVA: Miner and commodity trader Glencore PLC yesterday said it had agreed to sell a 40 percent stake in its agricultural business to Canada Pension Plan Investment Board for US$2.5 billion and use the proceeds to reduce debt, which is among the highest in the sector.
Glencore’s net debt had increased to about US$30 billion as of February, as commodities prices hit multiyear lows and markets have been concerned the high debt levels could compromise the Swiss company’s ability to run its trading unit effectively.
Glencore said it expects the deal, which values Glencore Agri at US$6.25 billion, to close during the second half of this year and, eight years after that, either the Canadian pension board or Glencore could move to take the business public.
