Noble to sell US ethanol producer for $16.8m

Commodities trader Noble Group is selling its United States-based ethanol-producing business to agricultural and transport firm Zeeland Farm Services. The unit is fully held by Noble Americas Corp, which Noble is selling to Vitol US Holdings.
Commodities trader Noble Group is selling its United States-based ethanol-producing business to agricultural and transport firm Zeeland Farm Services. The unit is fully held by Noble Americas Corp, which Noble is selling to Vitol US Holdings.PHOTO: BLOOMBERG

North Americas South Bend Ethanol's book value was around $108m as at Sept 30

Embattled commodities trader Noble Group is selling its United States-based ethanol-producing business for US$12.5 million (S$16.8 million) plus adjustments for working capital, inventory and debt.

The unit - North Americas South Bend Ethanol (Nasbe) - is being bought by family-owned agricultural and transport firm Zeeland Farm Services.

Nasbe, which owns and operates an ethanol production plant in South Bend, Indiana, had a book value of around US$80.4 million (S$108 million) as at Sept 30, with a net tangible asset value of US$80.4 million.

The deal comes as Noble is selling off its lucrative global oil liquids business. Nasbe is fully held by Noble Americas Corp (NAC), which Noble is selling to Vitol US Holdings.

Vitol had planned to offload Nasbe itself after the acquisition of NAC but has agreed to allow Noble to sell the unit before or simultaneously with the NAC takeover.

If the sale to Zeeland Farm takes place before or together with the NAC sale, the base consideration for NAC, which was US$217 million as at July 1, will be reduced by one quarter of the proceeds received from the Nasbe sale.

If the sale falls through, Vitol will carry on with its own sale of Nasbe after the NAC deal is completed.

The deal comes as Noble is selling off its lucrative global oil liquids business... Noble said in a statement that the net proceeds of the Nasbe sale will be "made available to reduce Noble Group's indebtedness".

Noble said in a statement that the net proceeds of the Nasbe sale will be "made available to reduce Noble Group's indebtedness".

A version of this article appeared in the print edition of The Straits Times on November 28, 2017, with the headline 'Noble to sell US ethanol producer for $16.8m'. Print Edition | Subscribe