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Glencore, Lonmin : what went wrong thread


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Glencore, Lonmin : what went wrong thread

 

https://www.google.com/finance?q=LON%3AGLEN&ei=7IMJVsmyEcrKeIe-p8AK
Glencore£0.72

https://www.google.com/finance?q=LON%3ALMI&ei=9YMJVvicE8-7e56Fp8AL
Lonmin £0.16


http://www.telegraph.co.uk/finance/11895789/Glencore-shares-obliterated-after-analysts-warn-they-could-be-worthless.html
'GlenGlencore shares plunged 30pc in afternoon trading to a new record low after analysts warned the stock could be worthless if commodity prices remain at current levels.
However, the broker warned that: "If major commodity prices remain at current levels, our analysis implies that, in the absence of substantial restructuring, nearly all the equity value of both Glencore and Anglo American could evaporate."'






interested in the views on here about the restructuring that looks imminent for both these.lonmin particularly looks attractive post rights issue/debt for equity.......also interesting about the mention of Anglo am in the same breath as glencore,which seems hyperbolic.

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http://www.moneyweb.co.za/news/companies-and-deals/lonmin-plc-drew-down-400million-facility-sources/

'Lonmin Plc drew down a $400 million revolving credit facility as the third-biggest platinum producer is locked in talks with bankers to restructure the debt, due to expire next year, two people familiar with the matter said.

 

The company withdrew funds as it needs cash to continue operating amid falling platinum prices and to strengthen its position in negotiations with lenders over the facility, scheduled to mature in May, said the people, declining to be identified as they aren’t authorized to talk about the action.

 

The metals producer hired Greenhill & Co. to advise on the refinancing or restructuring of its debt, people familiar with the matter said in August.

 

Lonmin declined to comment, said James Clark, a spokesman for the company at Cardew Group in London. Jeffrey Taufield, a spokesman for Greenhill employed by Kekst & Co. in New York, declined to comment on Lonmin’s strategy.

 

Lonmin is burning through cash and needs to refinance or restructure debt because of losses it’s suffering after a 45 percent plunge in platinum prices since 2011. It already plans as many as 6,000 job cuts and delays in capital spending to preserve cash. Shares of the South African miner, which had $282 million of net debt as of March 31, have tumbled 87 percent this year, the worst performance on the London Stock Exchange’s broadest gauge of equities.

 

The company also holds three facilities from South African banks of 660 million rand ($49 million) each that mature in June. Lonmin had meetings with these lenders last week and is due to talk to offshore credit providers, the people said. The continuing drop in the company’s market value is making it more difficult to arrange new terms with the financiers, the people said.'

 

 

Personally,I think these will end up going for debt for equity.rights issues are expensive both in terms of fees and the spreads they have to offer the brokers.i saw someone saying they were looking at a 50% haircut on what they'll actually get.

Lonmin,particularly seems an exciting opportunity.

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GLNCY / Glencore PLC ADR (OTC) ... update : uk-6mos : 10-d
gln_zpsr0gmbaax.gif
(from ZeroHedge article):
"What a junking of Glencore would do, is start a collateral demand waterfall cascade that the cash-strapped company simply would not be able to sustain." So having laid out the strawman, Goldman next, very conveniently, explains just what would take for the Investment Grade trap to slam shut: "it would only take a c.5% fall in spot commodities prices for concerns about its credit rating to resurface."

Of course, Glencore's leverage to commodity prices was first explained in our March 2014 post, in which we said buying Glencore CDS is the best and easiest way to bet on a Chinese credit and commodity crunch.

Fast forward to Monday morning when those who bought into Glencore's equity offering at 125p less than two weeks ago on September 16, are already down a whopping 43% (we won't even bother calculating the loss since the company's 2011 IPO), following the biggest daily drop in Glencore history, with the stock mauled some 27% at last check...

GLEN%20buy%20CDS_0.jpg

Meanwhile, those who listened to our reco to buy Glencore CDS at 170 bps in March 2014 can take the rest of the year off. As of this moment, GLEN Credit Default Swap were pushing on 600 bps, 4 times wider, and on pace to take out the 2011 liquidity crunch highs. After that, it's smooth sailing to all time wides and the start of a self-fulfilling prophecy which leads to the Companys's IG downgrade and the collapse of trillions in derivative notionals as what may be the trading desk of the biggest commodity counterparty quietly goes out of business.

 

 

> http://www.zerohedge.com/news/2015-09-28/glencore-implodes-stock-plunges-most-record-cds-blows-equity-wipeout-fears
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With Glencore, Commodity Rout Beginning to Look Like a Crisis

The 15-month commodities free-fall is starting to resemble a full-blown crisis.

Investors are reacting to diminished demand from China and an end to the cheap-money era provided by the Federal Reserve. A Bloomberg index of commodity futures has fallen 50 percent since a 2011 high, and eight of the 10 worst performers in the Standard & Poor’s 500 Index this year are commodities-related businesses.

Now it all seems to be coming apart at once. Alcoa Inc., the biggest U.S. aluminum producer, said it would break itself into two companies amid a glut stemming from booming production. Royal Dutch Shell Plc announced it would abandon its drilling campaign in U.S. Arctic waters after spending $7 billion.

And the carnage culminated Monday with Glencore Plc, the commodities powerhouse that came to symbolize the era with its initial public offering in 2011 and bold acquisition of a rival in 2013, falling by as much as 31 percent in London trading.


http://www.bloomberg.com/news/articles/2015-09-28/with-glencore-commodity-rout-beginning-to-look-like-a-crisis

From a panic like we are seeing in Commodities, a new BULL MARKET may be born.
When exactly, I cannot say - but perhaps very soon

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STRESS TEST ? : Who will buy all those inventories ??

 

Have we already seen (most of) the expected Glencore-related "firesale" in the Copper market?

Copper_zpspap8knui.png

 

Sell Glencore as copper tumbles - Telegraph

Jan 15, 2015 - The idea was that by combining the Glencore commodity trading house with a ... In turn, the mining operation would get the best prices in the market for the .... We all know about Kerry Katona and George Best going bust but there's ... If you work here, it will take you 550 years to save for a house deposit.

 

(more recent articles):

The Beginning Of The End For Glencore, And How To Trade It
Sep 2, 2015 - Under the "doom and gloom" case Glencore would go bankrupt. ...
how much the debt-to-equity exchange will have to be in the coming year, ...

Nah, they won't go under.
The Next Leg Of The Commodity Carnage: Attention Shifts To
Aug 19, 2015 - Which will be first: Trafigura, Mercuria or Glencore. — zerohedge .....
And who will mine those mountains of debt if they all go bankrupt??!! Wed ...
Glencore Share Chat - Chat About GLEN Shares - GLEN
Under this the debt has first claim on profits, cash and any assets, while equity ...

Glencore has always argued that it can rapidly sell its inventories of metals to reduce debts ...

21:10, Valued at £100 bills at one time wheres it all gone..? blueball.

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THE FIRST CUT IS THE DEEPEST

The cuts are the deepest announced yet in the copper market, but they do add to a growing producer response to low prices.

Freeport McMoRan will chop around 68,000 per tonnes both next year and in 2017 by suspending its Miami mine in Arizona and reducing output at both its Tyrone mine in New Mexico and its majority-owned El Abra mine in Chile.

Asarco, the U.S. unit of Grupo Mexico, will cut operating rates at its Ray complex in Arizona, resulting in around 30,000 tonnes per year lower production.

Interestingly, all three producers are taking the cuts at mines that either directly produce refined metal via solvent-extraction-electrowinning (SX-EW) technology or that are integrated into smelter-refineries.

This is important since it means the cutbacks will impact immediately the refined copper market rather than being transmitted, possibly with reduced effect, through the raw materials chain.

Read also: Freeport to resume Indonesian copper exports

And, together with another shutdown in the Copperbelt, the Chinese-operated Baluba mine, they are forcing a collective reassessment of copper’s supply-demand drivers.

Analysts at Macquarie Bank, for example, said they had “stripped a massive 345,000 tonnes of supply from the 2016 balance, pushing it into a 248,000-tonne deficit.” (“Copper supply wobbling on cuts,” Sept. 8, 2015)

> http://www.biznews.com/thought-leaders/2015/09/10/andy-home-glencore-still-bosses-the-copper-market/

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Glencore Is The Lehmann Brothers of Mining; Can Be Disruptive to Sector - Frank Holmes - Kitco Video News, Sep 30 2015 4:18PM

 

Despite gold’s drop to a two-week low Wednesday, US Global CEO Frank Holmes says that the metal may be ‘on sale.' The yellow metal is looking to end the third quarter down roughly 5%, which would mark its second consecutive lower quarterly close. December Comex gold futures were last quoted down 1% at $1,115.50 an ounce. 'According to Holmes, gold remains 'one of the strongest assets’ and has managed to be ‘quite resilient compared to so many other currencies.’ He also chimed in on IMF head Christine Lagarde’s recent bearish comments on commodities, as well as concerns surrounding the world’s largest gold-consuming nation. ‘What’s important about China is that the government continues to buy [gold] and continues to report the buying for more transparency,’ he noted. ‘I also think it’s really important [to note ] the US mint's commentary that gold consumption is rising,’ he added. On the mining front, Holmes shared his thoughts on Glencore’s comeback on Wednesday as the company stock closed 14% higher after hitting an all-time low Monday. Holmes said the billion-dollar company is considered the ‘Lehman Brothers of mining’ and it is the reason investors are concerned about the sector. ‘There are also rumours that Goldman Sachs is looking to be disruptive of [Glencore’s] empire. That would be incredibly destructive for the mining sector,' Holmes noted. Kitco News, September 30, 2015

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Glencore + Trafigura = Marc Rich!!!

 

With Glencore telling the market it's going to sell off it's gold and silver streams you can GUESS which side of the market they have placed their TRILLIONS in derivative bets!

 

http://www.silverdoctors.com/mining-giant-glencore-to-sell-gold-silver-output-to-pay-down-debt/

 

How come nobody talks about the REAL Glencore? The company created by the long time member of "America's 10 Most Wanted Fugitives", Marc Rich, who groomed "The Rich Boys" who split off to trade/corner the market on all commodity trading through Glencore and Trafigura.

 

Glencore and Trafigura = MARC RICH!!!

 

It's so obvious. Marc Rich was hired by Kissinger and the Mossad in the 1970's to rig the oil markets to set up petro-dollar. Hired by Clinton in the 1990's to rig the metal markets for the "strong dollar policy" in exchange for pardons for Rich, Pincus Green, Ivan Glasenberg (now CEO of Glencore) and Dauphin (Majority owner and Chairman of Trafigura who suspiciously DIED yesterday).

 

The collapse of Glencore and Trafigura is not only the collapse of the PHYSICAL side of the cabal but the MAJOR COUNTER-PARTY of the Banksters!

 

And by the way...

 

A trader ALWAYS lies to the public in favor of their derivative book so GUESS which way the Glencore Derivative Book is weighted when it comes to gold and silver!!!

 

It's gonna get ugly.

 

This is the end game my friends.

 

May the Road you choose be the Right Road.

 

Bix Weir

www.RoadtoRoota.com

 

Trillions?

I don't think so.

Unless they are laid out like a daisy chain; back-to-back

If back to back, as is the only possible way, there's NO ONE DIRECTIONAL Bet

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According to the Bloomberg article, Glencore’s next step seen as selling future gold, silver output:

 

The company is seeking more than $1 billion in a so-called precious metals streaming deal linked to some of its mines in South America, according to two people familiar with the situation, who asked to not be identified because the talks with potential buyers are private. The transaction is part of Glencore’s broader restructuring to reduce its $30 billion debt pile by about a third and bolster its finances to withstand a continuing slide in commodities.

The company produced 35 million ounces of silver last year and 955,000 ounces of gold from mines in South America, Kazakhstan and Australia.

The company’s negotiations in the streaming deal are likely to attract interest from the small group of companies, such as Silver Wheaton Corp., that specialize in the transactions, which give miners upfront payments in exchange for metal that’s later sold. Other companies involved in those kind of sales include Franco Nevada Corp.

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As A Shocking $100 Billion In Glencore Debt Emerges, The Next Lehman Has Arrived http://www.zerohedge.com/news/2015-10-07/shocking-100-billion-glencore-debt-emerges-next-lehman-has-arrived …



Nevertheless - a bounce in the stock is still underway



GLEN.L ... update : 10-d


aa_zpstegxqwgy.gif


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  • 1 month later...

GLEN.L ... update : 10-d / Last:

90.58
Change:
arrow_dn_sm.gif-3.40
Open:
94.50
High:
95.9261
Low:
89.91
Volume:
61,662,458
Percent Change:
-3.62%

 

It's looking like a retest of the Low at 66.67P is possible

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  • 2 weeks later...
  • 4 weeks later...

Game Over Noble Group?

Is bankruptcy imminent for this prominent Asia-based commodity trader?

More>

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