(Bloomberg) -- Glencore Plc agreed to sell its metals warehousing business for $176.7 million to Infinity Logistics and Transport Ventures Ltd., exiting from a corner of trading that's proven lucrative yet controversial in recent years.
The company has been selling smaller assets recently, including oil terminals in the U.S. and some smaller mines, as it simplifies its business. Glencore benefited from owning storage depots in recent years as it collected rent on excess inventories built up during an industrial downturn, but now wants to cash out as others look for access to these facilities.
Glencore acquired the business from Italy's Pacorini Group in 2010, when weak demand in the wake of the financial crisis had created huge surpluses of metals including aluminum and zinc. Supply conditions have tightened dramatically in recent years, with all major industrial metals flashing signs of tight supply as exchange inventories drop.
Glencore, JPMorgan and Goldman Sachs Group Inc. later faced legal action from consumers who accused them of inflating prices by restricting access to metals in their storage depots. Access World also faced scrutiny in 2017 after a high-profile fraud that left banks and brokers facing more than $300 million in losses.
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Infinity Logistics said in a filing Monday that adjustments relating to the financial condition of Access World could push the deal value to as much as $180 million. Infinity is listed in Hong Kong and based in Malaysia's Port Klang, a major storage point for exchange-traded metals.
Glencore said in December that it had already agreed on disposal of seven assets and was running 10 more processes with another 15 assets under review.
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