Pre-market trading started yesterday (19-05-11), but full market trading to start next week, Tuesday as it now stands (could change). 530p the float price.

Chart to come when I get it, and any other updates/corrections that I happen to spot.

Why Glencore shares could be worthless

So the article says 37p is on the cards... very grim with 30 billion debt. Disastrous!

From the same article :-

"Should Glencore actually close a session below 97p, it's going to need a bit of a miracle as there's clear air between such a point and 37p," says Strang.

Does it mean the price will be either 97+ or 37-?
Which bank lent to them?
How are they going to be affected?

I still hold from 340!!!

I know the pain.

IF, IF, IF it survives?

what price to buy?

It is tempting as there seems to be a smell of capitulation with volume today - doubtless exaggerated by the numerous doom laden articles - hmmm.

Skinny, you are a brave man to hold this.

I don't (yet)! :-)

AAL looks tempting too but where is the bottom?

Sitting in my armchair and occasionally squeaking!

In a media statement on Wednesday, Glencore said it has taken proactive steps to position the company to withstand current commodity market conditions. "Our business remains operationally and financially robust - we have positive cash flow, good liquidity and absolutely no solvency issues," it said. Glencore said it's getting on and delivering a suite of measures to reduce its debt levels by up to $10.2bn.

30 Sep Deutsche Bank 190.00 Hold
30 Sep Citigroup 170.00 Buy
30 Sep JP Morgan... 150.00 Neutral

Barclays note on the current situation:
"Business remains operationally and financially robust and is de-gearing on spot prices
Management reiterated that the business remains operationally and financially robust and that there are no liquidity or solvency issues. The company has positive cash flow and as a result the balance sheet is continuing to de-gear.
The company does not have any debt covenants and its bank facilities and extension of these facilities are not reliant on specific credit ratings. The two RCF facilities (syndicated with 60-70 banks) have no conditions attached to them (no MACs) and can be rolled at Glencore’s option – these are rolled in March-May of every year – even in 2008/09 the company was still able to comfortable roll its $9bn RCF facilities although at a higher spread (200bps).
Little credit or counterparty risk in commodity trading
One of the misconceptions is that Glencore needs its IG credit rating for the marketing business. Most of the other commodity traders have a lower rating than GLEN and they are still able to operate in this environment. The higher cost of trading does impact trading competitiveness but most of the traders pass this through to customers. At the moment this appears to be minimal given the low interest rate environment.
The other misconception in the market surrounds credit and counterparty risk – almost all trade in commodity markets use Letters of Credit (LCs) that are guaranteed by banks. This is the key difference in commodity markets vs financial markets where there is not this transmission mechanism – so very little credit and counterparty risk exist in commodities trading. Glencore has up to $50bn of LC lines with over 70 banks for trading, of which 30% is currently utilised (c.$17bn currently for trading which is in-line with RMI size). Glencore also immediately hedges commodities taken on its trading book so there should be no price risk. Most of these trades are hedged on exchanges such as the LME, so the counterparty is the LME Clearing House. However, a small proportion of the trades (3%) cannot be hedged as there is no liquid forward/futures market (e.g. vanadium). We also note that the company cannot hedge physical premiums, so they will always be long metal premia – this is what caused some of the M2M losses in trading in the H1 results (c.$200m).
The trading business is mostly vertically integrated except oil.
The average inventory turn for the trading business is about 32 days – within this oil trading has a much faster cycle of c.8 days while metals is c.40 days. As commodity prices fall, cash is naturally released back to the balance sheet from the fall in RMIs (per inventory cycle). RMIs amount to c.$17bn, of which oil is roughly $12bn. RMIs are audited and have to be deliverable to a liquid market.
The only part of Glencore’s commodity trading business that is regulated is the oil business (UK regulator).
Further opportunity to reduce working capital in marketing
As the company mentioned at its interim results, management believe there are further opportunities to reduce working capital further in the trading business. Within RMIs there is a long tail of less profitable trades (8-10% ROE vs the overall business of 25-75% ROE) – a lazy balance sheet historically has allowed traders to chase these lower returning trades. However, with the company now much more focused on capital allocation within the marketing business, mgt mentioned they could see a further $2-3bn reduction. CFO Steve Kalmin mentioned in the interim results presentation that c.$5bn reduction in working capital would only sacrifice $100m of EBIT in marketing due to this long tail of lower ROE trades.
$10bn debt reduction/capital preservation programme on track
We believe the company’s $10bn capital preservation programme is a credible way to reduce net debt from about $30bn in June to the low 20s by the end of next year. Of that $10bn $5bn has already been delivered with more to come over the coming months and next year. Management commented that this programme was envisaged for a low $4000/t ($1.80/lb) copper and $50/t coal environment. For the asset sales (guidance of $2bn), management hopes to complete the streaming deal by the end of this year and the sale of a minority stake in its Ags business early next year – we believe this is in line with market expectations."

Glencore's Glasenberg Talks Up Copper's Prospects--Update
Print
Endeavour International Corp. (USOTC:ENDRQ)
Intraday Stock Chart
Today : Monday 5 October 2015


By Scott Patterson
Glencore PLC Chief Executive Ivan Glasenberg, speaking publicly for the first time since his company's shares plunged a week ago, said he believes copper prices will ultimately rise as mine supplies are pulled from the market.

Mr. Glasenberg, speaking in central London, said the Swiss mining giant's plans to take 400,000 tons out of the market with the shutdown of two copper mines in Africa, announced in its sweeping balance-sheet restructuring plan last month, "should have an effect on the price" as demand ultimately outweighs supplies.

Mr. Glasenberg has blamed hedge funds, including some operating in China, for artificially pushing copper prices lower.

"The funds are playing the commodity cycle," Mr. Glasenberg said. "But in the end the fundamentals will prevail," noting that "demand is still there."

Mr. Glasenberg said his company has seen a "massive destocking around the world" this year in commodities such as copper as prices decline. He said there is only three weeks supply of copper stock available in warehouses, which he said is "the lowest inventory I've seen in copper stocks for many years."

Glencore is particularly vulnerable to sliding copper prices. The company produced 730,900 tons of copper in the first half of 2015. A 10% decline in copper from where it stood in the first half of the year would erase about $1 billion from Glencore's adjusted earnings, according to estimates by Liberum Capital analyst Ben Davis. On the other hand, a 10% gain would be a boon for Glencore and help ease fears about its high debt levels.

Glencore last month said it planned to shutdown one copper mine in the Democratic Republic of the Congo and another in Zambia for 18 months while it upgrades the infrastructure. Some had questioned whether the company would get pushback from the governments of the two countries amid concerns that the shutdowns would hurt employment.

Mr. Glasenberg said Monday at the FT Africa conference that he "must congratulate both the president of the DRC and Zambia because they understood what we're doing." Since the mines were unprofitable, the countries weren't getting a decent tax return on the production of the mines, he said.

"Long term it is better for them when we do dig it out of the ground and they'll get more revenue, more taxation," he said. "There is no reason to keep digging the stuff out of they round when you're not making a decent margin," Glencore's CEO said.

Plunging commodity prices have sapped Glencore's earnings this year. In the first six months, it posted a loss of $676 million, and its high debt levels have sparked concerns that the company could be slapped with downgrades by ratings firms if its earnings fall much further.

Mr. Glasenberg has been scrambling to allay investor fears about the impact of sliding commodities. He has been jetting around the world, visiting mines, investors, banks and trading offices trying to gather information and allay market fears. The CEO believes markets have overreacted to the firm's situation, though he has noted the risks of carrying too much debt and owning mines at a time of weak commodity prices, according to people who have spoken with him in recent weeks.

The company's shares and bonds have been whipped around over the past week by those fears, including a 29% drop a week ago that has since been erased. The stock was up around 7.4% in morning trading in London, thought the shares are still down by nearly two thirds so far this year.

Glencore executives are struggling to stop the bleeding by selling assets and cutting billions in debt. Last month, Glencore raised $2.5 billion in a share offering. It also said it would suspend its dividend and raise cash by selling assets

Glencore says its finances are solid and credit lines from more than 60 banks are intact. Banks have appeared to stand by those credit agreements.

Good day here ..

More than half of the leading banks' exposure to commodities is through loans to Glencore, the debt-laden mining group and commodity trader whose shares have suffered sharp swings since a leading analyst warned that they could be worthless. - The Times.

.. Watch out chaps!

Fantastic upswing here the same as KAZ in the last few days ..

http://www.telegraph.co.uk/finance/markets/ftse100/11916483/FTSE-hits-seven-week-high-as-Morgan-Stanley-rates-mining-sector-attractive.html

Canaccord note:
"Share price collapse.........and partial recovery
Glencore's shares slumped from 300p in early May, to c.120p in early September, triggering a capital preservation/debt reduction programme (announced 7 September) worth US$10.2bn and intended to reduce net debt to the low US$20bn's by end 2016. Shares continued to fall on debt concerns, collapsing 29% on 28 September to 69p, but have since recovered to c.120p. In our view, the share price fall was driven by excessive fears of a potential credit downgrade/debt default, and is not warranted.
Glencore's debt: a reality check
Even after removing readily marketable inventories from net debt, Glencore carries midyear net debt of US$29.6bn, significantly more than any of its FTSE100 mining peers. However, a review of statements from Moody's and S&P demonstrates that the ratings agencies are comfortable leaving Glencore's investment grade ratings unchanged at BBB/Baa2, particularly given the 7 September announcement. Both agencies have moved to a negative outlook, which seems sensible given the impact on cashflows should commodity prices fall demonstrably lower on a sustained basis. While both agencies note that Glencore will be outside the preferred guidelines for its credit rating they see this as a temporary (c.6-18-month) issue. In its funding factsheet, released 6 October, Glencore outlined the limited impact of a credit rating downgrade.
Glencore's debt: our view
In this note we outline changes to our commodity price estimates, and revise our forecasts for these, for lower unit costs (due to weakening commodity-backed currencies vs US$), and for the capital preservation/debt reduction programme. While Glencore has no formal debt covenants, management's internal targets are greater than 25% funds from operations (FFO)/net debt and less than 3x net debt/adjusted EBITDA. Based on our forecasts, we see FFO/net debt dropping below this threshold at YE2015, but recovering in 2016, while net debt/adjusted EBITDA should remain below the targeted level for both years.
Changes to forecasts
Our adjusted EBITDA estimate drops from US$9,397M to US$9,141M in 2015, and from US$11,074M to US$9,231M in 2016. Our underlying diluted eps forecast remains unchanged for 2015 at 6.3c and drops from 7.8c to 4.4c in 2016. We believe that EBITDA is the most relevant metric at this point in the cycle.
Target price lowered; Speculative Buy recommendation maintained
Our target price is a function of NPV, EV/EBITDA relative to the company's history, and rolling 12-month PE relative to the market. Given our lower commodity price assumptions, we reduce our target price from 220p to 190p. However, this still leaves upside of over 50% to our target price, and we remain positive on the stock, retaining our Speculative Buy recommendation. There are clearly still potential risks should commodity prices decline further but we believe that the shares have been oversold on debt concerns. Certainly, the ratings agencies don't seem to be as troubled as some in the equity market; investors should take note of that."

http://www.moneyam.com/action/news/showArticle?id=5129666