Troubled Glencore looks to offload part of business

Shares in mining giant Glencore soared Monday on reports it was in talks to sell its agriculture business, providing relief for the company battling weakening demand for raw materials. Shares closed up 17.76 percent to HK$12.60 in Hong Kong after rocketing by 72 percent at one point -- leaving the company baffled as to why they climbed so much. Singapore's sovereign wealth fund, Japanese trading house Mitsui & Co., and a Canadian pension fund are among potential buyers of the unit, Bloomberg News reported last week. The agricultural unit could be worth US$10 billion, according to research cited by Bloomberg News. However, Glencore said in a statement to the Hong Kong Stock Exchange it did not know of specific reasons for the massive intra-day jump in the share price. The group's London-listed share price was up 13.42 percent at 107.75 pence in early afternoon deals. "The board confirms that it is not aware of any reasons for these price and volume movements or of any information which must be announced to avoid a false market in the company's securities," a Glencore statement said. Shares in the Swiss-based firm had already fluctuated wildly last week amid investor fears that sinking commodity prices would affect its ability to meet outstanding debt obligations. Financial group Investec questioned its future if commodity prices -- which are wallowing at multi-year lows owing to weak demand from a slowing China -- fail to recover soon. Most resources-linked firms have taken a hit in recent months as the price of copper, aluminium, iron ore and oil have tumbled. But Glencore has been particularly badly hit because of its huge US$30-billion debt load, even after the firm this month raised US$2.5 billion via a shares sale as part of a vast plan to rejig its finances. Speaking at a conference in London on Monday, Glencore chief executive Ivan Glasenberg said rival firms should shut loss-making copper mines to tighten the market. "Don't create oversupply in the market for no reason," he was reported as saying by the FT at the newspaper's summit on Africa. Glencore has mothballed output at two copper projects in Africa, according to Glasenberg.