Glencore Buy Prodeco Coal Mining Assets From Xstrata Mining Company
Glencore can make the call option to buy back Prodeco for $ 2.25bn before March 4. But before the third quarter earnings reports lingering concerns that the buy-back, even if affordable, not in the interests of improving the value of Glencore credit.
Miriam Hehir, a credit analyst at RBC Capital Markets in London, gave a statement “We hope to buy back from Glencore Xstrata Prodeco related options before ending in early March. The minimum price was $ 2.25bn, but we could see it again changed hands for a few hundred million on top of this, Glencore could reduce the need for funds associated with the minority partners may be involved, or a release elsewhere.
Prodeco sales of $ 2 billion allowed Glencore to subscribe to rights issues Xstrata, the London listed global miner where Glencore has a 34 percent stake.
Since then, Prodeco Xstrata has essential for financial recovery. Assets alone Xstrata lifted production of coal, the most profitable commodity, the company’s first quarter and third quarter.
Along with improving corporate financial, mining companies plan to buy back the coal mines Prodeco from Xstrata.
Glencore is a mining company that operated the mine Prodeco. Prodeco coal mines located in the region of Colombia. Prodeco mining assets sold to Xstrata in January, when the company’s financial weakening.
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