The Glencore Group in making progress with the sale of its agriculture division, expected to take place before the end of June 2016.
In late September, the Group reacted to deflating commodity prices across its majority metals and coal mining operations by launching a debt reduction programme to reduce company borrowings from $30 billion to $20 billion. A $2bn asset sale, including the agriculture division, features alongside the sale of $2.5 billion of new stock, spending cuts and suspension of the dividend.
Glencore reports interest in the Agriculture division from a “broad spectrum of interested parties, including industry participants, financial investors, private equity, pension funds and sovereign wealth funds”. With indicative bids sought by mid-December, it anticipates agreeing a sale within H1 2016.
The Agriculture division had handled 8.5 million tonnes of crop commodities by the end of September 2015, compared to 8.3m tonnes at the nine month stage of the 2014 year. Its oilseed crushing volumes rose by 6% to 4.4m tonnes, with more crop processed in Argentina and a contribution from a new plant acquired in Germany. However, biodiesel processing fell by 25% to 412,000 tonnes in line with falling demand due to regulatory changes and lower fossil diesel prices.
The division had 2014 earnings of $992 million on revenues of $25.82bn as part of the overall Group profit of $4.2bn on sales of $221.07bn.