Nathaniel Rothschild to scoop £25m in Glencore float

By ROB DAVIES FOR THE DAILY MAIL
Updated: 20:26 EST, 19 April 2011

MultiI-millionaire and banking dynasty heir Nathaniel Rothschild is set to make more than £25million when commodities giant Glencore floats, less than two years after his initial investment.

The jet- setting financier bought £25million worth of convertible bonds – which can be turned into equity – as part of a £1.4billion debt issue launched by the Swiss firm in December 2009.

The bond sale valued the company at around £22billion and was widely seen as a prelude to going public.

Glencore’s float is now tipped to value the firm at as much as £48billion, meaning Rothschild would see his £25million of bonds convert into shares worth more than £50million.

Rothschild is part of an elite circle of super-wealthy and powerful businessmen who stand to make millions from Glencore’s listing on the London and Hong Kong stock markets. 

Chief executive Ivan Glasenberg was on the guest list for Rothschild’s lavish birthday party at his marina development in Montenegro last July, a shindig reputed to have cost at least £1million.

Glasenberg’s stake in Glencore – believed to be around 15 per cent – would leave him sitting on a equity worth around £6billion. Both men are also closely acquainted with Tony Hayward, the gaffe-prone former boss of BP who will become Glencore’s senior non-executive director.

Rothschild caused a storm in 2008, when he revealed that George Osborne – then shadow chancellor – had discussed a donation to the Conservative party with Russian oligarch Oleg Deripaska. His revelations were allegedly disclosed in revenge after Osborne revealed details of private talks with Lord Mandelson while they were staying at Rothschild’s Corfu villa, seen as a breach of his hospitality by the financier.

Rothschild will not be alone in making a rapid return on his investment in Glencore’s bond issue. Major asset managers including BlackRock and Fidelity are also expected to end up with valuable stakes in Glencore, as it heads for the largest listing in London’s history.

The massive rewards available for backing Glencore offer a tantalising glimpse into the mechanics of the money-spinning mega-float. Glencore’s top 65 partners will end up with stakes worth more than £150million, while the eight banks working on the float will share fees for their trouble approaching £250million.

The huge sums contrast sharply with the fortunes of workers at its many mining operations around the world. Last week, the Mail revealed Glencore had been accused of avoiding taxes in Zambia, through its copper mining subsidiary Mopani Mining Company. The secretive company denied any wrongdoing.