Glencore Took $480 Million Provision on Radiant World Exposure
Glencore Plc took a provision of about $480 million on its exposure to Radiant World, the iron ore trader that is under pressure amid concerns it provided falsified documents to banks, according to people familiar with the matter.
Glencore has provisioned an amount of approximately US$480 million to cover its exposure to Radiant World, a key trading partner embroiled in controversy over falsified documents, according to sources familiar with the matter. The provision covers Glencore's full net exposure to Radiant World, which amounts to US$951 million, while Glencore owes Radiant World US$471 million as per a letter from the company to Glencore.
The provision, disclosed on August 29 by the Financial Times, includes Glencore's exposure to Sapphire Minmetals, a trading house perceived by Glencore as part of the same group. Despite being below its materiality threshold, a loss of US$480 million is a significant setback for Glencore, particularly its iron ore unit. Radiant World had threatened legal action against Glencore, alleging a relationship beyond that of a counterparty, but Glencore vowed to contest these claims.
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