Glencore to suspend dividend, raise equity to cut debt

The company seeks to cut its net debt to $20 billion by the end of next year.

Underground at Glencore’s Kroondal chrome mine in South Africa. Picture: glencore.com.

JOHANNESBURG - Mining and commodities trading firm Glencore on Monday said it will suspend dividends, sell assets and raise $2.5 billion in a new share issue as it aims cut its net debt to $20 billion by the end of next year.

The London-listed company has been under pressure to cut debt - which stood at $29.6 billion at the end of June, as prices for its key products, copper and coal, have sunk to more than six-year lows.

Glencore said 78 percent of the proposed equity issuance was underwritten by Citi and Morgan Stanley, while its senior management will take up the remaining 22%.

It also said it would not be paying a final dividend for 2015, which would save about $1.6 billion, while around $800 million would be saved from the suspension of the 2016 interim dividend.