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Xstrata shareholders approve coal expansion

Xstrata shareholders pave the way for emphasis on coal mining Keystone

Shareholders of the Zug-based commodities company, Xstrata, have approved plans to move the company into the top league of the world's coal groups.

This content was published on March 19, 2002 - 14:57

Xstrata is to merge with a new company under British law, Xstrata plc, and be listed on the London stock exchange.

The deal is part of Xstrata's plans announced last month to acquire the coal mining activities of its main shareholder - another Zug-based commodities group Glencore International - for $2.5 billion (SFr4.15 billion).

Finance for the acquisition, which concerns 12 mines in Australia and 14 in South Africa, will be raised by $900 million in shares and $2 billion in debt.

Glencore International currently has a 38.5 per cent stake in Xstrata, which will be raised to 40 per cent, with the company in future having a right to a maximum of three Xstrata board members.

Under British law, Glencore International will be considered as the controlling shareholder of Xstrata. However, the two entities will continue to work independently.

Fourth largest player

Xstrata will become the mining industry's fourth largest player behind BHP Billiton, Rio Tinto and Anglo-American.

The company has sought a London listing because the London stock exchange is the world's largest mining market.

Xstrata plc will also seek secondary listing on the Swiss stock exchange and has already received approval in principle for its inclusion in the index.

swissinfo with agencies

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