In a move seen as a precursor to an initial public offering for Glencore International AG, a group of institutional investors will invest about $2.2 billion into the Swiss commodity trader, the Wall Street Journal said, citing people familiar with the situation.

The paper said the deal would likely be structured as a convertible preferred security that could ultimately turn into common stock in the Swiss-based company.

U.S. private-equity firm First Reserve Corp plans to invest about $1 billion in the world second-largest independent oil trader and will lead a group that includes mutual funds and other energy-focused funds, the people told the paper.

First Reserve and Glencore could not be immediately reached for comment by Reuters outside regular office hours.

In August, London's Independent newspaper reported a mining source as saying Glencore is looking to raise between $1 billion and $1.5 billion.

The loans would then be converted to equity at the time of a probable flotation in 2012, the newspaper said.

In June, bankers familiar with Glencore's thinking told Reuters that any public listing was likely to be years away. [ID:nSP449365] (Reporting by Ajay Kamalakaran in Bangalore; Editing by Anshuman Daga)

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