Noble Group shareholders back agri deal, but concerns remain

The deal will yield US$750 million (S$1.1 billion) in cash proceeds for Noble and take away its 49 per cent guarantee for Noble Agri's debt.
The deal will yield US$750 million (S$1.1 billion) in cash proceeds for Noble and take away its 49 per cent guarantee for Noble Agri's debt. PHOTO: REUTERS

SINGAPORE - Singapore-listed Noble Group received a majority shareholder backing to sell its shares in Noble Agri to Cofco International, but investor concerns continued to hound the emattled company.

In the special general meeting held on Thursday (Jan 28) and attended by 284 shareholders, the motion to divest all of Noble Agri shares was carried with 90 per cent of the vote.

The sale will yield US$750 million (S$1.1 billion) in cash proceeds for Noble and take away Noble's 49 per cent guarantee for Noble Agri's debt.

Company chairman Richard Elman and chief executive Yusuf Alireza, both present at the meeting, stressed that this will strengthen Noble's liquidity while removing a persistent drag on earnings.

While the divestment was approved, multiple shareholders raised their concerns at the meeting.

Several questioned the US$546 million non-cash loss in the deal, as a result from the loss of Noble Agri's book value. In response, Mr Elman noted that the devaluation is due to the difficult market conditions.

Others sought comments on Noble's loss of investment grade ratings with Moody's and Standard & Poor's.

Calling the decisions "disappointing", Mr Alireza said that Noble has actually exceeded the rating agencies' requirements, and the downgrade is targetted at the struggling commodity industry, not specifically at Noble.

The company also addressed concerns around Iceberg Research, which announced on Wednesday that it has a fourth report in the works. Iceberg's critics and allegations have been at the centre of Noble share price collapse since last year.

Mr Elman said Iceberg is motivated by market manipulation, adding Noble's legal proceedings against Arnaud Vagner - allegedly Iceberg's mastermind - are still ongoing, with the next hearing slated for March 6.