Glencore to expect around $1 billion for coal trains

Glencore to expect around $1 billion for coal trains

Glencore PLC (LSE:GLEN) announced today it is selling its coal trains in Australia, hoping to get at least US$1.1 billion as they attempt to cut debt.

The Swiss mining company is trying to cut its net debt this year by around $8 billion.

GRail owns nine trains and transports most of Glencore’s 51 million tonnes of coal a year manufactured in the Hunter Valley to the east coast port of Newcastle.

Francis De Rosa, the company’s Australia spokesman said Glencore is confident on attaining a sale price above $1 billion.

GRail has made A$100 million in earnings in 2015 before interest, tax, depreciation and amortisation (EBITDA). The earnings have been better than any mine sale in today’s market.

RBC is advising Glencore and is addressing interest from pension funds and infrastructure funds, hoping the sale process will start in April.

The final sale price weighs on the charge Glencore asks for after GRail is sold. If the charge is higher, Glencore will look for a higher price tag.