Glencore has been selling assets and trimming costs as part of an effort to cut net debt to as low as $17-billion this year.Arnd Wiegmann/Reuters
Glencore PLC is in advanced talks to sell nearly 10 per cent stake of its agriculture unit to British Columbia Investment Management Corp., people familiar with the matter said, as the company seeks to reduce its debt pile.
The sale could value the stake at about $600-million (U.S.) excluding debt, one of the people said.
The commodities trader and miner, which sold a 40-per-cent stake in the business to Canada Pension Plan Investment Board for ($2.5-billion) in April, may reach an agreement on the stake sale as early as this week, the people said, asking not to be identified as the information is private. Glencore plans to retain majority control of the business.
Glencore shares rose as much as 5.9 per cent in London on Wednesday.
A spokesman for Glencore declined to comment. A representative for BCIMC didn't immediately respond to a call and e-mail outside of regular business hours.
Glencore has been selling assets and trimming costs as part of an effort to cut net debt to as low as $17-billion this year, compared with $25.9-billion at the end of 2015. The company was in talks with potential investors from Qatar, Saudi Arabia and Canada to sell a further stake in the agriculture unit, people familiar with the matter said last month. The business handles wheat, corn, barley, biofuels, cotton and sugar.
Glencore is also considering options for its Kazakh gold mine that include selling the asset or its future production, people familiar with the matter said in May.
BCIMC, Canada's fourth-largest pension fund, has a history of investing alongside CPPIB, including most recently as part of a consortium that aims to acquire Australian port and rail company Asciano Ltd. for roughly $6.7-billion.
The Victoria, B.C.-based pension fund has about $124-billion (Canadian) in assets under management, and oversees the retirement savings of 526,000 plan members in the province as well as the insurance and benefit funds of 2.2 million people in B.C.
Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a senior independent non-executive director at Glencore.