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| Glencore is seeking to raise an estimated $10bn |
The region’s coal buyers have said they want a share of the world’s largest commodities trader if it decides to pull the trigger on an IPO, sources familiar with the process said.
If the world’s largest commodities trader decides to stick to its planned timetable for an early May listing, it will need to fire the starting gun in around 10 days’ time.
That makes next week crucial for Glencore in shoring up demand and making sure its advisers have everything in place to push ahead with the IPO.
Interest from some of the trader’s biggest customers is a positive signal for the proposed dual-listing in London and Hong Kong, given recent market volatility.
Glencore is seeking to raise an estimated $10bn by ditching its long-standing partnership structure in favour of life as a public company, which will make it easier to reward partners and make acquisitions.
Glencore has met with several potential “cornerstone” investors from Asia to the US to gauge interest for the IPO. If all goes to plan, this could kick off during the first week of April with a so-called intention to float (ITF).
That would follow an April 1 deadline for sell-side analysts to complete their research notes on the company.
Assuming Glencore follows the usual four-week initial public offering (IPO) process, that would allow it to complete the listing in early May.
“Everyone was raising their hands, saying we want to be a part of this,” said one person directly involved in the plans, about meetings Glencore had with potential investors in Asia.
Glencore has played a cagey game since raising expectations of an imminent IPO by briefing sell-side analysts, stressing that a listing is just one of the options it is considering. Some estimates say an IPO would value Glencore at $60bn.
But the group led by chief executive Ivan Glasenberg looks to be ploughing ahead with its plans for a public listing, with its top management meeting big US and Canadian fund managers last week and moving closer to hiring a group of banks to help run the planned float.
“This is an offer that is too big to fail,” another source with direct knowledge of the matter said.
If it decides to proceed with the offer, Glencore is aiming to launch the retail portion of a Hong Kong IPO in the third or fourth week of April, with a listing scheduled for early May, sources with direct knowledge of the matter said.
To meet that target, Glencore should seek a formal listing approval with the Hong Kong stock exchange by the second week of April at the latest, the sources said.
Asia’s biggest sovereign wealth funds and some Hong Kong billionaires are seen as likely to invest in the IPO as cornerstone investors. Such investors are common to many large Asian IPOs and they are assured firm commitments in the offer.
Cornerstone investors usually have a lock-in period of up to one year. They bring more credibility to the IPO, which in turn helps the underwriters to generate more demand for the offer.
Expectations of a flurry of pre-Easter share offerings were dented by a spike in volatility in global stock markets due to heightened fears of a Japanese nuclear crisis and over rising unrest in North Africa and the Middle East.
That uncertainty led Danish outsourcing group ISS to pull a potential $2.8bn float hours before its expected debut on the Copenhagen exchange, while French media group Lagardere cancelled a planned listing of pay-TV channel Canal+.
But markets have since stabilised, increasing the chances of Glencore proceeding with its IPO as planned.