In turnaround, commodities giant Glencore to resume dividend

GENEVA – Commodities giant Glencore will resume paying a dividend worth $1 billion, a sign of improved financial health for a company that was just last year facing questions about its ability to cope with slumping prices.

The Anglo-Swiss company says it’s reinstating the dividend next year after having sold off assets worth US$6.3 billion — over three times its previous guidance.

Two major Canadian pension funds were among the buyers, paying a total of US$3.125 billion to buy nearly half of the Swiss company’s agricultural products division, which includes the Viterra grain-handling business.

Glencore — based in Baar, Switzerland, but listed in London — has about 150 mining and metallurgical sites. It markets over 90 commodities including copper, zinc and nickel to industrial customers.

Its shares nosedived last year as investors worried about Glencore’s ability to handle debt. The company responded by cutting production and costs, and selling off assets.

It acquired Viterra — a multinational grain handler and agricultural products company headquartered in Regina — in late 2012 for C$6.1 billion.

In April of this year, the Canada Pension Plan Investment Board agreed to pay US$2.5 billion for 40 per cent of the Glencore Agri agricultural products business that includes Viterra. In June, the British Columbia Investment Management Corp. agreed to buy 9.99 per cent of Glencore Agri for US$624.9 million cash.

CEO Ivan Glasenberg said Thursday that Glencore had delivered on its commitments to cut its debt and strengthen its balance sheet, and now “can look forward to the future with confidence.”