Before you jump on the Glencore bankruptcy bandwagon consider these perspectives from an investment banker, a debt market investor, an equity trading desk veteran, a credit rating analyst, a hedge fund manager and, believe it or not, the company itself.But first, here is the controversial view of the world’s biggest commodities trader from the analyst at Investec Bank who triggered a 30 per cent plunge in the company’s share price on Monday.Investec’s Hunter Hillcoat said in a note to clients: “At current spot prices, all else being the same, Glencore’s equity value is zero”, according to The Financial Times.He went on to say that “using a PE-based approach to evaluate equity value going forward, in proportion to debt, we note that the heavily indebted companies could see almost all equity value eliminated under spot conditions, leaving nothing for shareholders”, according to Zerohedge.In other words, the total equity on the Glencore balance sheet of $US47.45billion is worthless.While that is a scary conclusion for Glencore shareholders to digest, it was Hillcoat’s statements in relation to Glencore’s readily marketable inventories or RMI, which really put the cat amongst the pigeons.RMI is the physical commodities trading inventory owned by Glencore and used in its day-to-day business of trading commodities on global exchanges and over the counter. The RMI is worth about $US18billion.Hillcoat gives Glencore no credit for something which the company and credit ratings agencies regard as being as good as cash.
- An error has occurred; the feed is probably down. Try again later.
- NETL experts say research could improve Marcellus Shale environmental impacts - Daily Energy Insider March 20, 2019
- CPPIB, Williams to form $3.8 billion Marcellus-Utica shale gas venture - Reuters March 18, 2019
- Shale study: Marcellus to supply 45 percent of natural gas to US - northamericanshalemagazine.com March 20, 2019
- Mexican presidential frontrunner will not reverse energy reform: adviser
- Global commodity trader Koch cuts staff in restructuring
- Energy partnerships simplify business models to spur growth
- Mexico Strives to Generate a Homespun Fracking Revolution | 2018-02-21 | Natural Gas Intelligence
- Avant plans logistics system to import refined products into Mexico
- Mexico’s Natural Gas Dilemma | OilPrice.com
- India Wants Eleven More LNG Import Terminals
- Energy CEOs ask President Trump to fund Port of Corpus Christi Ship Channel Improvement Project – HBJ
- Q&A: Plastics boom keeps Houston humming – Houston Chronicle
- Commodities fund Jamison Capital to shut – Reuters