A Peruvian zinc miner has seen its bonds tumble to an all-time low as investors grow increasingly concerned about its ability to refinance maturing debt and Swiss commodities giant Glencore Plc looks to sell its controlling stake.
Glencore last year started looking into selling its 23% stake in Volcan, amounting to 55% of its class A voting shares, as the Swiss firm looks to simplify its business. That potential for a change in a key owner adds uncertainty to the outlook for Volcan’s debt. The Lima-based miner ended the second quarter with about $50 million of cash and has a revolving credit facility of $50 million available until November. Its liquidity is coming under pressure from lower prices for zinc, which is often used to galvanize steel for automaking or construction.
Some analysts see an opportunity in the company’s debt. Bonds of Volcan trimmed losses after hitting a record low.