TIDMGLEN
RNS Number : 2585I
Glencore PLC
31 March 2020
Glencore plc
Baar, Switzerland
31 March 2020
2020 Distribution and Revolving Credit Facilities
The COVID-19 pandemic has generated exceptional social and
financial impacts around the world. Glencore's first priority
remains the health and wellbeing of our people, their families and
our communities. We understand the uncertainty caused by the
current environment and will endeavour to support our workforce and
local communities, as appropriate.
Simultaneously, we are taking prudent action to protect and
strengthen our capital structure amid the current period of
heightened uncertainty in order to enable us to more safely
navigate this challenging environment.
The Company reaffirms its commitment to maintain strong Baa/BBB
investment grade credit ratings, supported by a near-term Net debt
target range of c. $14-15 billion (from $17 billion at 31 December
2019, excluding marketing related lease liabilities) and a Net
debt/Adjusted EBITDA target ratio closer to 1x.
To support this commitment, the Board believes it prudent to
defer its decision as to whether to proceed with the proposed cash
distribution of $0.20 per share (c. $2.6 billion) in 2020, amid the
current period of exceptional economic uncertainty. We have also
reinforced our liquidity position ($10.1 billion of committed
available liquidity as at 31 December 2019) through the refinancing
and extension (see below) of our revolving credit facilities (the
"Facilities") on the same commercial terms as our 2019
Facilities.
Glencore continues to generate material levels of positive free
cash at current production levels and spot prices, due to its
globally diversified marketing / distribution business and
industrial asset portfolio, including many large-scale, low-cost
assets. The significant weakening of our key producer currencies
against the USD (AUD, ZAR, CAD, KZT etc.), capital expenditure
deferrals being implemented and lower oil prices and interest rates
have provided substantial cash offsets to the fall in USD commodity
prices and some level of COVID-19, mainly government imposed,
production disruptions.
We intend to provide updated guidance in respect of 2020
production, key industrial division unit costs and capital
expenditure, alongside our Q1 production report, scheduled for
release on 30 April.
2020 Distribution
The Board considers it prudent to defer its decision as to
whether to proceed with the proposed cash distribution of $0.20 per
share (c. $2.6 billion) in 2020, in order to strengthen the Group's
overall financial position and reflecting that, although none to
date, there exists the risk of material production disruption due
to COVID-19.
When the Board is in a better position to consider COVID-19's
updated impacts, the economic outlook, and the Company's prospects,
expected alongside release of the Group's interim results in Q3
2020, it will then decide what level of distribution would be
appropriate to make this year.
Refinancing and extension of Revolving Credit Facilities
Our Facilities have been refinanced and extended, effective 22
May 2020, on the same commercial terms as our 2019 Facilities.
The shorter-term Facilities were initially launched at $8
billion and closed substantially oversubscribed, raising $10.75
billion. Reflecting strong support from Glencore's broad group of
relationship banks:
-- Glencore scaled back subscription levels and ultimately
increased the size of the Facilities to $9.975 billion, up from the
$9.775 billion signed in 2019
-- A total of 48 banks committed to the Facilities, including 31
Mandated Lead Arrangers and Bookrunners.
The longer-term $4.65 billion revolving credit facility was
extended to 2025.
The new and extended facilities are for general corporate
purposes, comprising:
-- a $9.975 billion 12-month revolving credit facility, with a
12-month term-out option at Glencore's discretion, and a 12-month
extension option
-- a $4.65 billion 5-year revolving credit facility with a
12-month extension option
As in previous years, these committed unsecured facilities
contain no financial covenants, no rating triggers, no material
adverse change clauses and no external factor clauses.
Glencore's Chairman, Tony Hayward, commented: "As well as
prioritising the health and wellbeing of our people, their families
and our communities, we are taking a cautious approach to protect
our capital structure amid the current period of extreme
uncertainty. Therefore, notwithstanding that Glencore continues to
generate material levels of positive free cash in the current
environment, the board considers it prudent to defer the
distribution decision. We will review the opportunity for a
distribution at our August results, when we will have an improved
understanding of COVID-19's impact on our business and its
prospects."
For further information please contact:
Investors
Martin Fewings t: +41 41 709 2880 m: +41 79 737 martin.fewings@glencore.com
5642
Maartje Collignon t: +41 41 709 3269 m: +41 79 197 maartje.collignon@glencore.com
4202
Media
Charles Watenphul t: +41 41 709 24 m: +41 79 904 charles.watenphul@glencore.com
62 33 20
www.glencore.com
Glencore LEI: 2138002658CPO9NBH955
This announcement contains inside information
Notes for Editors
Glencore is one of the world's largest global diversified
natural resource companies and a major producer and marketer of
more than 60 commodities. The Group's operations comprise around
150 mining and metallurgical sites and oil production assets.
With a strong footprint in over 35 countries in both established
and emerging regions for natural resources, Glencore's industrial
activities are supported by its global marketing network.
Glencore's customers are industrial consumers, such as those in
the automotive, steel, power generation, battery manufacturing and
oil sectors. We also provide financing, logistics and other
services to producers and consumers of commodities. Glencore's
companies employ around 160,000 people, including contractors.
Glencore is proud to be a member of the Voluntary Principles on
Security and Human Rights and the International Council on Mining
and Metals. We are an active participant in the Extractive
Industries Transparency Initiative.
www.facebook.com/Glencore
www.flickr.com/photos/glencore
www.instagram.com/glencoreplc
www.linkedin.com/company/8518
www.slideshare.net/glencore
www.twitter.com/glencore
www.youtube.com/glencorevideos
Disclaimer
The companies in which Glencore plc directly and indirectly has
an interest are separate and distinct legal entities. In this
document, "Glencore", "Glencore group" and "Group" are used for
convenience only where references are made to Glencore plc and its
subsidiaries in general. These collective expressions are used for
ease of reference only and do not imply any other relationship
between the companies. Likewise, the words "we", "us" and "our" are
also used to refer collectively to members of the Group or to those
who work for them. These expressions are also used where no useful
purpose is served by identifying the particular company or
companies.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCUARORRSUOOAR
(END) Dow Jones Newswires
March 31, 2020 09:07 ET (13:07 GMT)
Glencore (LSE:GLEN)
Historical Stock Chart
From Apr 2024 to May 2024
Glencore (LSE:GLEN)
Historical Stock Chart
From May 2023 to May 2024