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Glencore widens debt-trimming plan as commodity rout deepens
[ZURICH] Glencore, the world's largest mining company, widened its debt-trimming plan on Thursday, part of an effort to cope with the worst commodities downturn in seven years.
The Switzerland-based company had in September announced drastic moves to trim its towering debt, but said it now needed to do more.
Glencore said it wanted to get debt between US$18-$19 billion by the end of next year, after previously announcing a target of US$20 billion.
Spending projections have also been cut back, with US$3.8 billion allocated for investments in 2016, down from an earlier estimate of US$5 billion.
Highlights of the updated plan to stabilise the company's books include new share sales and plans to spin off copper mines in Australia and Chile.
Glencore, the world's most indebted mining company, said it had already achieved US$8.7 billion in reduction to its debt, which had stood at US$30 billion.
Broadly, the measures underscored the continuing rout in the commodities market, which analysts say has no end in sight and has forced major players in the sector to recalibrate after years of bumper profits.
"We retain a high degree of flexibility and will continue to review the need to act further as required," Glencore CEO Ivan Glasenberg said in a statement.
Slowdowns in China, the world's top commodities consumer, triggered near-panic in the commodities market earlier this year.
Glencore had already scrapped its dividend and announced plans to scale back production at some of its mines.
The company's shares, which have been hammered in recent months, surged up by 10.5 per cent to 91.79 pence, following what appeared to be a positive reaction to the expanded debt trimming measures.