According to Core Strategic Partners, shares in mining and commodity trading conglomerate, Glencore, have surged after it revealed further measures aimed at reducing its colossal debt mountain. The Anglo-Swiss group is fighting for survival amid low prices for the commodities it produces.

The new measures, it says, will reduce its net outstanding debt to $18 -$19 million by the end of next year, an improvement on the original target of $20 billion and a far cry from the $30 billion net debt outstanding before its London-listed stock was routed in the summer.

“Glencore’s stock has been pounded this year plunging to an all-time low of just under £0.67 as investors questioned its ability to trade profitably in an environment where the prices for iron ore, copper and agricultural products were falling,” said Kris Gellar, commodity analyst at Core Strategic Partners.

Glencore was one of several mining concerns who took on large amounts of debt to grow operations and increase market share at the height of the commodities ‘supercycle’. The company had reasoned that China’s appetite for the raw materials to build its huge infrastructure projects would continue for many years but the economic slowdown there has seen Beijing cut imports of commodities, causing pain for producers.

“Glencore’s made commitments to reduce its debt and that is being reflected in widespread support from the stock from institutional investors but Core Strategic Partners is confident there’s much more upside which could manifest itself next year so we’re buyers here,” said Gellar.

Core Strategic Partners raised its rating on Glencore from ‘neutral’ to ‘buy’ and issued a price target of £2.10.

About Core Strategic Partners:
Core Strategic Partners' investment prowess is based on establishing a truly holistic understanding of our client's financial situation, objectives and risk profile. Through our delivery of independent, fee-based services and our philosophy of working closely with individuals, families and their professional representatives, we have established ourselves as a highly-trusted adviser to thousands of clients around the world.