Glencore PLC, the parent company of Viterra, is considering selling some of its Canadian grainhandling assets to reduce company debt and maintain its credit rating.
In a Sept. 7 conference call with investors, Glencore chief executive officer Ivan Glasenberg said the company is considering the sale of various agricultural assets in Canada and is also entertaining offers to sell a minority stake in Glencore’s global agriculture portfolio.
Together, the sale of assets in the company’s agriculture and precious metals portfolios is expected to generate roughly $2 billion.
Read Also
British Columbia farmers to receive increased AgriStability supports
B.C. farmers to receive bump in AgriStability compensations due to weather concerns, international trade instability
In Canada, the sale of agricultural assets would most likely involve former Viterra facilities, including inland elevators or port terminals.
In 2012, Glencore acquired Viterra’s assets — primarily grainhandling facilities in Canada and Australia — in a deal valued at $6.1 billion.
Switzerland-based Glencore is attempting to reduce its overall debt to the low $20 billion range.
To accomplish that, the company is suspending shareholder dividends, reducing working capital levels, planning an equity issuance worth as much as $2.5 billion and asset sales in Glencore’s precious metals and agriculture portfolios.
Together, the company’s debt reduction would have a value of about $10.2 billion, the company said.
“If we’re talking about (agriculture) infrastructure … it would be the former Viterra assets that would be the most sought after,” said Glencore’s chief financial officer Steven Kalmin.
Asset sales would be “relatively straightforward” and could be “concluded in the next few months,” he added.
Glencore officials did not say which Canadian assets are most likely to be involved in a sale, but Kalmin said the company has multiple ports, storage facilities and rail infrastructure assets.
In Canada, Viterra’s assets in-clude grain export terminals in Vancouver, Prince Rupert, Thunder Bay and Montreal.
The company also operates 70 primary elevators across the west and is Canada’s largest grainhandler, in terms of primary elevator storage capacity.
