Glencore books US$480 million provision covering entire Radiant World exposure: sources
Several major commodity traders have moved to cut ties with Radiant World amid concerns it provided falsified documents to banks
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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