Glencore fightback over debt fears lifts shares

Tue Sep 29, 2015 3:03pm EDT
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By Olivia Kumwenda-Mtambo and Lionel Laurent

JOHANNESBURG/LONDON (Reuters) - Glencore said on Tuesday it was strong enough to ride out current volatility in commodity markets, helping to lift the mining group's shares by a fifth.

Glencore's stock rebounded after a fall of 30 percent to a record low on Monday in response to uncertainty over its ability to cope with a prolonged fall in global metal prices.

Its shares closed up 16.9 percent at 84.91 pence in London.

The Swiss-based company said its business remained operationally and financially robust and it was confident in the medium and long-term fundamentals of its commodities, which include copper and coal.

"We have positive cash flow, good liquidity and absolutely no solvency issues," a company spokesman said in a statement.

"Glencore has no debt covenants and continues to retain strong lines of credit and secure access to funding."

Lenders said on Tuesday they remain supportive of the embattled commodities trader and mining company, which has around $13 billion of liquidity available and can finance its debt maturities for two years.

"We are watching quite carefully, but without the concern or type of hysteria you are seeing in equities," a head of loan syndicate at a bank said. "If the company is left to resolve its own issues, we are quite confident that they will do so."   Continued...

The logo of Glencore is pictured in front of the company's headquarters in the Swiss town of Baar, November 13, 2012. REUTERS/Michael Buholzer/Files