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Capital Markets

Glencore's senior executive Blumgart to leave in 2012

According to a source close to Glencore, the co-director of the alumina/ aluminium commodity department is set to leave this year, while the company reshuffles its heads of departments

Controversy surrounding the Glencore initial public offering may be heightened, after news that one of the world's largest commodities company's most senior executives, Steven Blumgart, is due to leave the company.


According to a source close to Glencore, Blumgart will leave sometime in 2012. He joined Glencore in October 1998, working for the coal/coke department for four years, before moving onto alumina/aluminium.


Blumgart is currently the co-director of the alumina/aluminium commodity department and is part of an 11-strong management committee listed on the company's website.


Gary Fegal shares the role with Blumgart and is also part of the management committee.


According to the source, as part of the elimination of co-heads, Fegal will take over as the sole head of the aluminia/aluminium commodity department after Blumgart's departure.


This will also mean that Kenny Ives will be promoted as head of the nickel division, while Stuart Cutler will now head up the ferrochrome division, after previously being the co-head of ferrochrome and nickel. Christian Wolfensberger, who was sharing the co-head of ferrochrome and nickel, will lead the iron ore department, says the source.


Glencore has declined to comment. 

Glencore headquarters


Glencore has been embroiled in controversy over the pricing of its IPO since it launched in May 2011. The shares were initially sold for 530p, but have failed to reach that level again. At its lowest, the Glencore share price hit 350p. At the time of writing, the shares stood at 420.80p, up over 1% from the previous session, while benchmark aluminium prices have plummeted on weak demand in recent months, falling below a key level of $2000 a tonne for three-month delivery.


Commentators had accused some of Glencore's senior executives of planning to cash in their shares in May 2011 – at the height of the aluminium market price – and ‘walk away’.


While the accusation may be revived following the reshuffling and departures of the senior executives, other sources dismiss it entirely.


A source says that “depending on the level of seniority, all the senior executives who own shares are locked in for sometimes years. There really isn't anything in the idea about people cashing in and walking away.”


Euromoney has followed Glencore's IPO from the outset. In October 2011, we revealed in depth how 'Glencore crashed through the equity markets.’


Glencore's chief financial officer, Steven Kalmin, spoke to Euromoney exclusively and defended the IPO.


He said: “In the main, investors are still supportive and philosophical about [the IPO]. It’s important to also look at the movement on a relative basis and over a longer period, as we’ve been in the midst of a risk-reduction phase since June and July. Almost all of our top shareholders have continued to maintain their sizeable presence on our share register since the time of the IPO.”


Looking back at the record-breaking IPO, he said: “We never intended to be aggressive on price and leave a bad taste in anyone’s mouth. It was always the plan to leave some money on the table. We felt it was priced fairly at the time, taking into account the market and shape of the book, which was heavily oversubscribed at every point in the price range. However, complete visibility on markets is often a challenge.”


For the full story and report, click here to see How Glencore crashed through the equity markets

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