Cofco eyes Noble's agribusiness

Noble chief executive Yusuf Alireza said last month that the group plans to raise US$500 million to repair investor confidence.
Noble chief executive Yusuf Alireza said last month that the group plans to raise US$500 million to repair investor confidence.PHOTO: BLOOMBERG

LONDON/SINGAPORE • Food giant Cofco of China is in advanced talks to take full ownership of Noble Group's agribusiness, buying the remaining 49 per cent stake for about US$700 million (S$985 million) to US$750 million, two sources said.

The state-run company acquired 51 per cent of Singapore-listed Noble's agriculture unit in April last year for US$1.5 billion.

Noble Group has confirmed that discussions with Cofco are on, but said the company will update the market at an appropriate time.

Cofco, however, was not available for immediate comment.

The expected deal follows a commitment last month by Noble chief executive Yusuf Alireza to raise US$500 million, seeking to retain its investment grade credit rating and repair investor confidence after a bruising accounting dispute.

Shares in Asia's biggest commodity trader have shed around two- thirds of their value since mid-February, when blogger Iceberg Research alleged the company was inflating its assets by billions of dollars by not fairly representing the value of its commodity contracts.

Noble rejected the claims and board-appointed consultant PricewaterhouseCoopers found no wrongdoing in a report published in August.

For Cofco, the deal would reinforce its position among the world's top global agricultural traders.

The talks may or may not result in a deal, but the two sources said they expected a deal to be announced imminently. The final value of any deal is also subject to change.

REUTERS

A version of this article appeared in the print edition of The Straits Times on December 16, 2015, with the headline 'Cofco eyes Noble's agribusiness'. Print Edition | Subscribe