HOTTER ON METALS: Glencore: bulletproof or still bleeding?
Glencore last week provided details of its current financial position in an attempt to demonstrate that its efforts to bulletproof its balance sheet are working.
There are certainly things to cheer about.
The Switzerland-based company now has a year-end net debt target of $25 billion and a net funding level of $40 billion, both down about 15-20% from previous goals.
The difference between the two figures implies readily-marketable inventories (RMIs) of $15 billion, down by $2.7 billion the company reported at the end of June.
An equity placement raised $2.5 billion; Glencore also raised $2.4 billion from the suspension of its full year 2015 and 2016 interim dividend.
It has increased its liquidity to $13.8 billion from $10.5 billion at the end of June, in part from the equity raising less dividend payment, continued cash generation and the further release of RMIs.
It has cut copper, zinc and lead production, is selling copper operations in Australia and Chile, and has put a stake in its agriculture business up for sale.