SINGAPORE/LONDON, April 29 Singaporean sovereign
wealth fund GIC is seeking to swap a $250 million portion of its
holding in Glencore International Plc convertible bonds
into shares in the company, in a vote of confidence as the
commodities trader wraps up its takeover of miner Xstrata Plc
Just days ahead of a May 2 completion date for Glencore's
tie-up with Xstrata, GIC, a shareholder in both, said it wanted
to sell part of its investment in Glencore's 2014 bond via an
It said on Monday, however, that it aims to use at least
part of the sum raised to simultaneously buy shares in the
commodities trader, boosting its existing stake.
GIC was a key investor in 2009, when, in a step paving the
way for its listing, Glencore issued to a small group of
investors a $2.3 billion bond that would become convertible into
stock when it went public, yielding an unusually high coupon of
5 percent. The trader then did list, in 2011.
GIC has not disclosed how much it invested in the bond. One
source familiar with the matter said the fund was among the
largest investors at the time, with the $250 million being sold
amounting to roughly half its remaining holding.
Also a cornerstone investor at the time of Glencore's 2011
IPO, GIC currently has a stake of just under 0.6 percent in
Glencore, according to Reuters data, making it one of the 30
largest holders of the stock. GIC was the second-biggest
cornerstone investor in Glencore's listing.
It also holds a stake of just under 1 percent in Xstrata.
GIC is not the first investor to swap Glencore convertible
bond for equity. Private investment firm First Reserve swapped
its entire $800 million holding for shares in September 2011.
GIC said in a statement the bonds would be priced using a
reference price of $5 per Glencore share, and it would purchase
equity at the same reference price from potential investors.
Glencore shares closed at 325 pence, or roughly $5.
GIC, which analysts estimate manages about $300 billion
worth of assets, said in a statement on the accelerated
bookbuild that the settlement would be on or around May 2.
Morgan Stanley acted as sole manager and bookrunner for the
bond offering, it said.($1 = 0.6455 British pounds)