SYDNEY: Glencore Plc will launch a secondary listing in Australia as soon as October as the mining giant seeks to tap new investment in the nation’s fast-growing A$4.4 trillion (US$3.1 trillion) pension system.
Chief executive of Glencore Gary Nagle confirmed the move on Glencore’s earnings call on Wednesday, telling investors that the firm aims to be included in Australia’s benchmark ASX 200 Index within 12 months.
“We believe that is fully achievable, and our ambition goes well beyond the ASX 200. We believe soon thereafter, we can, in fact, get ASX 100 inclusion, which requires approximately A$5.5bil on the Australian line,” he said.
Nagle said the move was designed to help access new sources of investment in Australia, adding that major players in the country’s pension sector were unable to invest further in the company without a local listing.
The funds also have keen understanding of the mining industry given the nature of the domestic economy.
“They have said to us that if there was an ASX line, that they’d be able to invest a lot more in Glencore,” he said.
The announcement comes six months after talks between Rio Tinto Group and Glencore failed, ending for now a deal that would have created the world’s biggest miner.
The listing plans are positive for Glencore, the Australian exchange and domestic investors, Luke Smith, co-head of Australian equities at the nation’s biggest pension fund AustralianSuper, said in an emailed statement. The proposal serves as a way for Glencore’s share price to “move closer to intrinsic value”, he added.
The company has been looking for new ways to attract more liquidity and raise its share price. — Bloomberg
