Glencore back from the brink as divi is restored

Glencore chief Ivan Glasenberg laid the foundations for a stunning revival of the battered trading powerhouse today by restoring its sought-after dividend and calling time on a drastic fire sale.

Glasenberg, who stared into the abyss last year because of the commodity price slump, roared back to life with a bullish forecast for the FTSE 100 giant’s future, helped by rising oil, zinc and coal prices and a nimbler balance sheet.

A determined effort by the trading maverick, who made his name and fortune dealing in coal, has slimmed down the firm’s bloated balance sheet and turned around its fortunes.

The South African billionaire promised to reward long-suffering shareholders with a $1 billion (£800 million) dividend windfall next year after he suspended the payment last year.

He also raised the prospect of a dividend rise in 2018 if commodity price continue to rebound from their decade-long lows.

“We have delivered on our commitments,” Glasenberg said. “Glencore can look forward to the future with confidence.”

It’s a reversal of fortune for the Swiss-based trading house where, 12 months ago, massive debts, slumping commodity prices and aggressive attacks by hedge funds drove it right to the edge.

The group offloaded parts of the business, selling an Australian rail firm — GRail — for A$1.1 billion (£650 million) which had come as part of its jumbo takevoer of Xstrata.

It also sold a stake in its agriculture unit to two Canadian pension plans for $3.1 billion.

Glencore said that it would shrink net debt to between $16.5 billion and $17.5 billion by New Year’s Eve, down from $26 billion this time last year.

A broad-based rise in the price of things such as copper, cobalt, nickel, zinc and thermal coal will also boost Glencore’s cashflow to around $6.5 billion next year.