The core of the matter

14 April 2011 By John Foley Follow @johnsfoley

The Swiss commodities trader hasn’t appointed a chairman, yet is pressing on with its IPO. The firm underestimated the difficulty of getting a strong candidate, or underestimated its importance. Glencore says it has found the right person. The name needs to be a real heavyweight.

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Glencore International announced its plan to issue equity through a $9 billion to $11 billion initial public offering in London in May, with a secondary share offering in Hong Kong. The IPO would value the Swiss commodities trader and producer at around $60 billion.

The firm said it had made a decision regarding its new chairman, but at the time of publishing its "intention to float" document in London on April 14 had not yet completed the final stages of making the appointment.

The listing would see 15 percent to 20 percent of the postIPO capital issued to external investors, raising $6.8 billion to $8.8 billion of new money. Of that, $5 billion would be allocated to capital expenditure, and $2.2 billion would be put towards raising Glencore's stake in zinc producer Kazzinc from 51 percent to 93 percent.

Glencore said its board of directors would comprise chief executive Ivan Glasenberg, finance director Steven Kalmin and six nonexecutives, led by former BP chief executive Anthony Hayward.

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