Core Strategic Partners: Mining and commodity trading giant, Glencore has agreed to sell a $2.5bn stake in its agricultural business unit to Canada’s largest pension fund. The deal is the Anglo-Swiss company’s latest bid to reduce its colossal debt burden.

Canada Pension Plan Investment Board will take a 40% stake in the unit which effectively values the entire agricultural division at $6.25bn, somewhat below the $10bn value placed on it by Citigroup late last year. The unit handles wheat, corn, barley, cotton and sugar and CPPIB beat off intense competition for the stake from Asian and Middle Eastern sovereign wealth funds as well as the state-owned Saudi Agricultural and Livestock Investment Company.

“Glencore’s fortunes have rebounded quite strongly since investors punished its stock last year as the commodity price slump raised questions about its ability to service a debt mountain of close to $26 billion,” said Will Masson, chief markets strategist at Core Strategic Partners.

Since then, Glencore has sold assets, closed mines, scrapped its dividend and raised $2.5bn in capital through fresh rights issues. It has promised to reduce its debt to just 17 billion by the end of 2016

Core Strategic Partners has a buy rating on Glencore stock citing the strong possibility of a rebound in commodity prices in 2016. “When the stock plunged last year, we were a lone voice advising clients to take positions at once-in-a-lifetime prices below £0.80,” said Masson.

At the time of writing, Glencore stock is trading at £1.39 and Core Strategic Partners has a price target of £3.30.

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