Noble Group said to ask banker Michael Klein to review options including selling stake in company

Noble Resources, a Noble Group subsidiary, at their premises in Singapore.
Noble Resources, a Noble Group subsidiary, at their premises in Singapore.PHOTO: REUTERS

LONDON (BLOOMBERG) - Noble Group, the commodity trader battling criticism of its accounting, has asked deal maker Michael Klein to review options for the Singapore-listed company, including raising secure financing from banks or selling a stake in the company.

Mr Klein, a former investment banking chairman at Citigroup Inc. who founded his own M&A firm after leaving the bank in 2008, started advising the company in recent weeks, according to a person familiar with the situation. The person asked not to be identified because the conversations are private.

Mr Klein brokered the talks between the bosses of Glencore Plc and Xstrata Plc that led to the US$29 billion all-share takeover of the mining group by the commodity trader in 2013. He also advised Dow Chemical Co. in its US$15 billion acquisition of specialty-chemicals maker Rohm & Hass Co. in 2009.

Noble disclosed on Aug. 3 that it had "been approached by a number of parties in terms of potential financings, and strategic and/or investment options." A representative for Noble declined to comment further. A call to Klein's New York office wasn't returned.

Noble chief executive officer Yusuf Alireza told investors on Monday that talks with potential parties were "ongoing." The commodities trader has lost more than half its value since mid-February when a group calling itself Iceberg Research criticized its accounting practices. Others including short- seller Muddy Waters have since joined questioning accounting processes at the company.

Noble published a report on Monday it commissioned from PricewaterhouseCoopers, in which the accounting firm said the company complied with international rules valuing its long- term contracts.

The trading house, which also reported a decline in quarterly profit, said the PwC report vindicated its business model.

"We have received a strong validation of our processes and controls," chairman Richard Elman said in a statement. PwC cautioned that its work was limited and it had no mandate to review individual transactions or accounts.