(Corrects paragraph 13, bullet 4 to show liquidity fell not rose from Q2 after Q2 fig corrected to $6.5 bln, not $3.2 bln)
* Considers listing in first half 2011 -sources
* May raise around 10 bln pounds -source
* Nine month profit surges 42 percent, net debt rises
* Liquidity falls to $4.6 bln vs $6.5 bln in Q2
(Updates with comments from sources on possible timing of IPO)
By Kylie MacLellan and Eric Onstad
LONDON, Nov 18 (Reuters) - Privately held commodities group Glencore is considering listing in the first half of next year, sources close to the situation said on Thursday, an IPO that could raise around 10 billion pounds ($16 billion).
Secretive Glencore, the world's biggest commodity trader, has been preparing to go public after issuing a $2.2 billion convertible bond last year.
The group, which posted a strong jump in nine-month profit on Thursday, is considering an initial public offering (IPO) that would likely launch off the back of full-year results in March or April, according to two people familiar with the matter who declined to be named.
Swiss-based Glencore declined to comment.
While no final decision has been made on the size of the offering, it could raise around 10 billion pounds, one source said, making it one of the biggest ever London flotations.
The IPO could to be a dual listing in London and Hong Kong, another source said.Morgan Stanley, Citigroup and Credit Suisse are expected to be involved in the listing.
An analyst said an IPO of Glencore would likely not take place until it completed a spin-off of its gold assets.
Ini August, Glencore unveiled plans for spinning off or listing its Kazzinc gold assets, which could be worth over $5 billion, next year.
Earlier in the year, speculation surfaced about a possible merger with miner Xstrata, of which Glencore is the biggest shareholder, with a stake of nearly 35 percent.
Major Xstrata investors said they were wary of linking up with Glencore ahead of an IPO due to the difficulty of valuing the private group.
PROFIT SURGES
Net profit in the first nine months rose 42 percent to $2.5 billion on a 40 percent rise in revenues to $105.9 billion.
Its industrial division, which includes mining operations, outperformed as average commodity prices surged 40-55 percent.
Glencore, whose debt burden worried investors during the downturn, said liquidity fell to $4.6 billion in the third quarter from $6.5 billion in the second quarter, but still beat a target of $3 billion.
Net debt rose to $15.2 billion from $13.6 billion in the second quarter, according to a statement released to bondholders and made available to Reuters by a source who had access.
"Net debt rising ... is less welcome for debtholders, but credit metrics are relatively stable, and liquidity is strong," said Miriam Hehir, director of credit research at RBC Capital Markets.
Third-quarter net profit rose to $979 million from $677 million in the second quarter, the highest level since the onset of the global downturn in 2008, Glencore said. (Editing by Will Waterman) ($1=.6296 Pound)