Commodities giant Glencore said Thursday that it was in the process of completing a plan to reduce its towering debt and aimed to resume dividend payments next year. Glencore, which has been scrambling for more than a year to cut back its debt-load after it peaked at around $30 billion, said Thursday its plan to reduce that burden was "nearing completion".
"Last year we announced a programme of measures to reduce our debt and structurally increase the flexibility and strength of our balance sheet," Glencore chief Ivan Glasenberg said in the statement. "We have delivered on our commitments and done so in a way that has preserved the long-term earnings capability of the group," he said, insisting that "Glencore can look forward to the future with confidence."
The debt reduction plan, launched in September 2015, included scrapping its dividend, suspending production at a number of mines, and selling off assets. Glencore said it was "on track" to see its net debt shrink to $16.5-$17.5 billion by the end of 2016, down from nearly $26 billion at the end of 2015. It also said it had divested $6.3 billion in assets, compared to the $1.2 billion it had expected to divest.
The Switzerland-based company said it was so pleased with its progress that it would reinstate its dividend payments next year, and said it had set aside $1.0 billion for dividend payments to in 2017. And starting in 2018, Glencore said its shareholders could expect the same amount, in addition to a minimum payout of 25 percent of its free cash flow.
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