x Abu Dhabi, UAEFriday 28 July 2017

Aabar takes $1bn stake in Glencore flotation

Abu Dhabi's investment vehicle, Aabar, has become the largest participant in the initial public offering of commodities giant Glencore

Khadem al Qubaisi, the chairman of Aabar Investments.
Khadem al Qubaisi, the chairman of Aabar Investments.

Abu Dhabi's Aabar Investments has emerged as the largest investor in Glencore International's US$11 billion (Dh40.4bn) initial public offering, the world's biggest IPO so far this year.

Aabar, which is majority owned by Abu Dhabi's International Petroleum Investment Company, yesterday confirmed it would invest up to $1bn in the flotation by Glencore, the world's largest diversified commodities trader.

Aabar will initially invest $850 million as Glencore's largest "cornerstone investor" and $150m during the subscription process.

The total investment will make Aabar Glencore's largest shareholder after the company's employees, including Ivan Glasenberg, the chief executive, who is the largest stakeholder.

Cornerstone investors would take about 31 per cent of the total offer, Glencore said yesterday, one of the largest cornerstone books to date.

Cornerstone investors are given priority over other, smaller investors but must agree to buy shares at the top of the price range in the book-building process. In this case, they must hold the shares for at least six months.

Khadem al Qubaisi, Aabar's chairman, said he was excited about potential opportunities in the relationship between the emirate and the trading house.

"We are pleased to count ourselves as the largest new shareholder of Glencore post its IPO," Mr al Qubaisi said.

Mohamed al Husseiny, the chief executive of Aabar, said the company intended to "explore in due course areas of co-operation between the two firms".

Glencore aims to raise as much as $11bn in a dual listing on the London and Hong Kong stock exchanges.

The company yesterday set a price range for the IPO of between 480 pence and 580 pence a share.After the flotation, the company is expected to be valued at about $61bn.

The listing will propel once publicity-shy Glencore into the limelight. It has signalled its ambitions to expand its production operations and buy a Kazakh mining group in a $3.2bn deal.

Cornerstone investors could buy nearly 30 per cent of the Glencore shares on offer - about $3.6bn worth if the listing raises its maximum target of $12.1bn.

On the day Glencore announced its IPO, the company shocked the market by revealing the extent of its hold over commodities. It said it controlled 60 per cent of the third-party zinc market, 50 per cent of copper, 45 per cent of lead, 38 per cent of alumina and almost a third of thermal coal.

 

fhalime@thenational.ae