Glencore Investments Lose $3.4 Billion, Threatening IPO Plans

Glencore International AG, the largest commodities trader, lost $3.4 billion in listed mining- company investments over the past month as global stocks fell, threatening plans for a share sale as its valuation slides.

The value of Glencore’s 10 largest holdings, including a 34 percent stake in Xstrata Plc (XTA), slumped 11 percent from Feb. 14 to $28.2 billion on March 15, exceeding the 5.4 percent drop in the MSCI World (MXWO) Index over the same period. Stocks have extended declines this week on concern a nuclear accident outside Tokyo may harm the global economy.

Glencore briefed analysts from 11 banks in the week starting Feb. 28 as it studies a $10 billion initial public offering in London and Hong Kong, two people with knowledge of the talks said at the time. The company may be valued at more than $60 billion should it seek a share sale, which could occur in May, RBC Capital Markets said March 3.

“The market is much more difficult than it was weeks ago and people start to get more risk-averse,” said Peter Braendle, a fund manager at Swisscanto Asset Management AG in Zurich, which oversees about $62 billion. “I could imagine Glencore delaying the IPO.”

Simon Buerk, a spokesman for Baar, Switzerland-based Glencore, declined to comment.

After its holding in Xstrata, Glencore’s next largest stake is an 8.8 percent interest in United Co. Rusal, the world’s largest aluminum producer. Rusal shares have sunk 9.1 percent since Feb. 14.

Glencore also owns 74 percent of Katanga Mining Ltd. (KAT) and 71 percent of Australian nickel producer Minara Resources Ltd. It holds stakes in Century Aluminum Co. and Nyrstar NV, the world’s biggest zinc producer.

On March 3, the company reported a 39 percent increase in 2010 net income excluding exceptional items to $3.8 billion. Glencore employs 2,000 people in its trading units and more than 50,000 at its industrial operations at 15 plants in 13 countries, according to a company fact sheet on its website.

Glencore’s 10 largest mining-company investments are given in its published holdings as of Dec. 31, according to its annual report to bondholders obtained by Bloomberg News.