[miningmx.com] – GLENCORE’S decision to cut its next two dividend payments, as well as unveil a raft of measures aimed at slashing net debt, may be followed by similar steps at Anglo American, said Bloomberg News citing analysts.
Glencore announced on September 7 plans to issue equity worth up to $2.5bn in an effort to reduce net debt to “the low $20s bn” by the end of 2016. The strategy also included the sale of $2bn in assets.
Analysts told Bloomberg News in an article republished by the Chicago Tribune that Anglo American may be considering similar measures for itself. “Glencore has set a precedent,” said Marc Elliott, an analyst for Investec Securities.
“It makes it easier for Anglo to cut the dividend, and to some extent a lot of people are already pricing it in. It will still hurt nevertheless if they do it,” he said.
“If you’re going to have a problem, it’s better to rip the band-aid off than not,” said Rob Clifford, an analyst at Deutsche Bank.
“Glencore just did it and the stock went up. So any companies who are thinking about strengthening their balance sheet might look at Glencore’s outcome and consider it as well,” he told Bloomberg News.
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