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April 12, 2011, 3:19 a.m. EDT

Glencore to Unveil IPO of Up to $11 Billion

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By Nisha Gopalan And Prudence Ho

HONG KONG—Glencore International AG, the world's largest commodities trading company by revenue, aims to raise between $9 billion and $11 billion from an initial public offering ahead of listings in London on May 24 and Hong Kong on May 26, a person familiar with the situation said Monday.

The Swiss company is set to announce the IPO on Thursday, and will sell the offering as a single global tranche, with around 2.5% of the shares sold to Hong Kong retail investors, the person added.

Glencore, which received approval to list in Hong Kong early this month, plans to give presentations to investors from May 4 to 13, and the indicative price range for the shares will be announced May 4. The final price will be set after those investor meetings.

The person added that the company is expected to be a constituent of the U.K.'s FTSE 100 after listing.

It wasn't known what percentages of the total offering would be allocated to Hong Kong and London, but a person familiar with the situation said earlier that London will be the primary listing venue for the stock and Hong Kong a secondary listing.

The IPO is set to be the biggest so far this year globally, topping the $5.5 billion offering in Singapore of Hong Kong tycoon Li Ka-shing 's Hutchison Port Holdings Trust last month.

Investor meetings for the Hong Kong IPO will be held in Hong Kong, Singapore, China and Australia, another person familiar with the situation said earlier.

The company recently embarked on a number of informal investors' meetings in Europe and Asia in an effort to lock in support for its plans, despite choppy markets.

In the immediate aftermath of Japan's March 11 earthquake, capital-raising plans for companies from a French pay-television operator to a Singapore engineering concern were canceled, delayed or scaled back. But markets in recent weeks seem to be regaining their poise. Hong Kong's Hang Seng Index closed Friday at 24396.07, its highest close since Jan. 19, before pulling back slightly Monday. The value of Glencore's holdings in publicly listed companies such as Xstrata PLC dipped after Japan's quake but have since rebounded.

Glencore, a leading force in the supply of commodities and raw materials like aluminum, copper, oil and wheat, has been closely owned and operated by a small group of partners since its founding 37 years ago.

If the world's economy hadn't slumped at the end of 2008 and financing hadn't severely contracted, Glencore would more than likely have gone for a listing already.

A US$2.2 billion convertible-bond offering at the tail end of the global financial crisis in December 2009 valued the company at US$35 billion. Now the firm's enterprise value is likely to range from US$50 billion to US$60 billion, another person familiar with the matter said last Friday.

Some big anchor investors are already lined up for a piece of the IPO, thanks to that convertible-bond issue. They include Government of Singapore Investment Corp., China's Zijin Mining Group /zigman2/quotes/203833875/delayed CN:601899 +1.08% Co. and BlackRock /zigman2/quotes/207946232/lastsale BLK -6.92% Inc. These investors have the right to convert their bonds into Glencore shares after the listing.

Glencore's revenue rose 36% to US$145 billion in 2010 and its net income rose 39% to US$3.8 billion, reflecting the recovery of commodity prices.

Glencore has mandated Citigroup /zigman2/quotes/207741460/lastsale C -8.57% Inc., Credit Suisse Group /zigman2/quotes/202835784/lastsale CS -5.19% and Morgan Stanley /zigman2/quotes/209104354/lastsale MS -7.00% to coordinate the dual listing, people familiar with the deal said earlier.

Other banks that have been given smaller roles in the offering are BNP Paribas /zigman2/quotes/206351084/delayed FR:BNP -5.96% SA, Bank of America /zigman2/quotes/200894270/lastsale BAC -6.88% Merrill Lynch, Barclays /zigman2/quotes/206581728/lastsale BCS -10.60% PLC, Société Générale /zigman2/quotes/206663756/delayed FR:GLE -9.53% SA and UBS /zigman2/quotes/206172872/lastsale UBS -3.89% AG. London-based Liberum Capital Ltd. is a co-manager of the share offering.

Write to Nisha Gopalan at nisha.gopalan@dowjones.com and Prudence Ho at prudence.ho@dowjones.com

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