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CFAC Owners Unveil $12 Billion Stock Offering
by Richard HannersHungry Horse News, May 10, 2011 |
The idea that Glencore, the Swiss commodities trader, could raise $12 billion by going public in an initial public offering while one of its subsidiaries, Columbia Falls Aluminum Co., is applying for a 95 percent tax break has rankled Montana Sens. Max Baucus and Jon Tester.
The School District 6 board of trustees and the Flathead County Commissioners shared those feelings. On Monday night in a joint meeting, both boards listened to CFAC's request and unanimously turned it down.
Several board members and speakers from the public wanted to know why a representative from the parent company, Glencore, failed to show up. The tax request was presented by CFAC spokesman Haley Beaudry, who said he hadn't received a paycheck in 1 1/2 years and was just trying to get the plant up and running to create jobs.
Many of the board members and speakers from the public expressed pessimism that the plant would ever restart, but that wasn't the position taken by Baucus and Tester. In a
May 3 letter to Stephen Wright, Bonneville Power Administration's CEO, and Matthew Lucke, Glencore's representative in Stamford, Conn., the senators urged CFAC's owners to find a solution for reopening the smelter plant, which would create as many as 350 good-paying jobs in the Columbia Falls community.
Citing a growing aluminum market and declining power prices, the senators wrote in support of a power-purchase agreement between BPA and CFAC that would pave the way to reopen the plant in the Flathead Valley.
"Now is the time for CFAC's owners to come to the table and find a solution to reopen the plant," Baucus said in a press release. "It's not just smart business, it's smart economic development for an area that's facing over 13 percent unemployment."
"The Flathead has the infrastructure in place and the people ready to work," Tester said in the same press release. "Now we're pushing for a responsible agreement to reopen CFAC and bring jobs back to Columbia Falls."
Tester told the Hungry Horse News last week that he thought a deal between CFAC and BPA was close at hand earlier this year but fell apart. "At one point in time, I thought (CFAC) would be open at Christmas time," Tester said.
The senators also expressed concern about Glencore's request to have 95 percent of CFAC's property taxes waived while announcing a $12 billion IPO listing in London and Hong Kong.
"Reducing the tax base in this manner is harmful for schools in Flathead County, and we urge Glencore to work with the local community to identify a reasonable solution," their letter stated.
In its 1,637-page prospectus values, Glencore, the worlds' largest diversified commodities trader, assesses its value at $60 billion. Taking the company public for the first time could make Glencore's CEO, Ivan Glasenberg, worth $9.6 billion, which is more than the founders of Google made in their IPO. Several other Glencore executives would become billionaires in the transaction, and Tony Hayward, BP's chief executive during the Gulf of Mexico oil spill, would become a senior independent director.
Glencore, which was founded as Marc Rich and Company in 1974, bought CFAC in 1999. The global commodities trader, which is known for taking on risky business ventures in dangerous Third World countries, separated itself from Rich in 1995 and changed its name to Glencore. Rich, who had been a fugitive in the largest tax evasion case in U.S. history, was pardoned by President Bill Clinton in 2001.
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