Bosses in line for billions as Glencore floats

Swiss commodities trader valued at £37bn
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The Independent Online

Five Glencore executives are set to see their personal wealth rocket into the billions when the Swiss commodities giant lists later this month.

The figures emerged as the trader laid the ground for a strong market debut yesterday with a pricing range of 480p to 580p per share, which, assuming the stock is ultimately priced at the mid-point, values the business at nearly £37bn. Conditional trading is set to begin on 19 May, with the company on track to secure a berth in the FTSE 100 index.

The dual London and Hong Kong float could see chief executive Ivan Glasenberg end up with a 15.8 per cent stake worth £5.8bn, catapulting the publicity-shy former coal trader into the ranks of the world's super rich.

Glencore's prospectus also showed that the heads of its zinc, copper and lead businesses, Daniel Badenes and Aritotelis Mistakidis, could end up with shareholdings worth more than £2bn each, while Tor Peterson, the head of Glencore's coal and coke department, could end up sitting on a stake worth about £1.9bn after the listing. Alex Beard, who runs the firm's oil arm, could be in line for a 4.6 per cent stake worth £1.7bn after the company goes public.

The chief financial officer Steven Kalmin, who will own 1 per cent immediately following admission, does not make the billionaires list with a stake worth around £370m. The figures assume that stock is priced at the mid-point, and are subject to other moving parts, including that the over-allotment option is not exercised.

The shareholdings are also subject to certain lock-up arrangements. Alongside figures on major shareholders, the hitherto secretive trading house also published pay details for its revamped board.

Mr Glasenberg and Mr Kalmin are on annual salaries of £925,000 and £700,000 respectively, while the non-executive chairman Simon Murray's yearly fees stand at £675,000.

Tony Hayward, the former chief executive of BP who was forced to resign after his public gaffes in the wake of the Gulf of Mexico oil spill, is being paid £158,000 a year as Glencore's senior non-executive director. He is also on a number of board committees, including the trading giant's environment health and safety committee.

Historically, Glencore has been entirely owned by its employees. By pricing the offering at a lower level than anticipated by some analysts, it was seen as paving the way for a strong performance after its initial public offering, something that would make sense given that the vast majority of the listed firm will remain in the hands of employees.

"The existing shareholders are mostly staying, so if they believe in the value of the company, they should be happy to see the share price rise rather than trying to get the full value at the point it lists," Collins Stewart's analyst John McGloin said.

"The one thing you don't want to do, I think, when you list any company, is overprice it and then have a negative momentum that you have got to try to turn around to get the share price up."

The float is backed by a number of cornerstone investors, who between them will take up about 31 per cent of total offer. The list features the likes of Abu Dhabi's Aabar Investments, which will plough $850m (£515m) into the IPO, and the Government of Singapore Investment Corporation, which has committed $400m.

Other cornerstone investors include Blackrock with $360m, and the hedge funds Brookside Capital and York Capital, who are investing $225m and $200m respectively. The pre-IPO support is expected to bode well for the float, with the cornerstone book set to go down as one of the largest on record.

Glencore billionaires

Ivan Glasenberg £5.8bn for the chief executive with a 15.8 per cent stake.

Daniel Francisco Mate Badenes £2.2bn (6 per cent).

Aristotelis Mistakidis £2.2bn (6 per cent).

Tor Peterson £1.9bn (5.3 per cent).

Alex Beard £1.7bn (4.6 per cent).

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