There is a new South African billionaire-in-the-making on the block, and he’s a man you’ve probably never even heard about.
Swiss-based Glencore International AG, the world’s largest commodities company will be floating 20% of its shares on the Hong Kong and London Stock Exchanges later this month at an initial public offering deal that could value the company at about $60 billion. The IPO is expected to raise between $11 billion and $15 billion, which will make it one of the largest offerings ever witnessed on the London Stock Exchange.
The biggest winner in this float will be none other than CEO Ivan Glasenberg, a reclusive 54 year-old South African who is a former champion race walker.
While detailed facts regarding Glencore’s shareholding structure are expected to be unveiled in a prospectus later today, Reuters is reporting that Glasenberg owns an 18.1% stake in the commodities giant, which will drop to a 15.8% stake in the IPO. If that’s true, his stake will be valued at $9 billion-$10 billion, making him even richer than South Africa’s current richest man, DeBeers Group Chairman Nicky Oppenheimer, who is worth $7 billion.
Glasenberg grew up in South Africa during apartheid. A qualified chartered accountant, he resolved to join the trading business after he observed a man sourcing candle wax from South America and selling it to Japan – on the phone. Thrilled about the prospects of becoming a trader, he joined Glencore in South Africa in 1983 as a coal trader after earning an MBA at the University of Southern California. Over the years, he’s enjoyed stints at Glencore’s offices in Australia, Hong Kong and Beijing, eventually becoming CEO at the company’s headquarters in Baar, Switzerland in 2002.
Glencore was founded by controversial U.S financier and former fugitive Marc Rich. He sold out to its current owners in 1993 for $600 million. Soon, the commodities giant could have a market value of $60 billion.
The world’s largest commodities trader is looking to raise over $11 billion through the offering. The funds realized will be used to create a cash mountain needed in making strategic acquisitions. Over the years the company has transcended from a commodities trading firm to an investment holding firm of sorts, making massive investments in fixed assets, including mines stretching from Australia to Latin America to Africa. The group now has interests across a range of commodities from nickel, coal to gold. At the last count, its major holdings included a 34% stake in Xstrata (worth $24 billion), a 71% ownership of Australian nickel producer Minara Resources, 9% of Rusal Aluminum, 40% of Century Aluminum, and huge shares in subsidiaries of Russian oil producer Russneft. The company also owns a 51% stake in Kazakhstan miner Kazzinc.
Glasenberg is expected to use part of the proceeds from the IPO to increase Glencore’s stake in Kazzinc from 51% to 93%. For more background on Glencore, see Christopher Helman’s concise history of the company here.