Glencore reports enough financing for 2009

Bloomberg reported that Glencore International AG third quarter profit rose 26% and it has enough financing to comfortably' cover debt maturing in the next 12 months. Glencore International AG net income excluding gains on sales of investments increased to USD 1.48 billion, from USD 1.18 billion in 2007. It added that it has no material unsecured obligations due in the next 18 months and letters of credit are fully available to its trading businesses. The cost of protecting Glencore's debt rose 12 fold in 2008 after commodity prices dropped and banks curbed financing. It owns 34% of copper producer Xstrata Plc, which has slumped 69% this year on the London Stock Exchange. The report added that Glencore raised its target for minimum liquidity to USD 3 billion from USD 2 billion. More than 60 banks are said to be committed for financing the company. Glencore will consider possible disposal opportunities for 2009. Metals and minerals accounted for 59% of gross income in the third quarter. Aluminum for immediate delivery averaged USD 2,789.75 per tonne on the London Metal Exchange in the period, up by 9.2% from 2007. Nickel was 37% lower while copper saw little changed. Glencore's sales gained 37% to USD 50.6 billion and USD 1.25 billion of working capital was freed up. Despite anticipated weaknesses, primarily in the metals industrial business unit due to lower prices, Glencore's highly diversified and unique business model is expected to provide healthy overall profit contribution in 2009. Capital expenditure at Glencore's operations will peak this year and decline significantly from 2009. Expansion projects include the Calenturitas and Jagua coal mines in Colombia and USD 279 million copper smelter at AO Kazzinc in Kazakhstan.