Glencore chief executive Ivan Glasenberg clearly doesn’t want to be accused of doing too little, too late in response to the commodities crash. In September, he announced a series of drastic measures to cut net debt by a staggering $10.2bn (£6.6bn) by the end of 2016. Today, he revealed Glencore will be half way there - by the end of December.
The firm’s new net debt target for the end of the year is a trifling $25bn, down from the $29.6bn on its books in June. It’s already raised $2.5bn through an equity issue and is on track to save another $2.4bn by suspending the full year and interim dividends.
Glencore has added to that with the first of two ‘streaming’ agreements, a selling future precious metal output in exchange for a lump sum. It’s a smart idea for a debt ridden firm with too much capacity. The deal it announced today with Canadian firm Silver Wheaton (guess which precious metal it’s after) will bring in a cool $900m.