HONG KONG • Creditors of commodity trader Noble Group have agreed to push back a key repayment deadline by four months, a source familiar with the matter said yesterday, providing a lifeline for the group.
The Singapore Exchange-listed company, battered by concerns over its financial strength in recent weeks, has been in negotiations with banks over a US$2 billion (S$2.8 billion) credit facility, secured on its inventories and working capital.
The facility is due to be rolled over by the end of next week. The expiry of the credit line has been extended until October. In exchange, creditors have asked Noble to find a strategic investor, the person said, declining to be named because the information is not public yet.
Noble declined to comment. Its shares closed up 8.3 per cent yesterday at 32.5 Singapore cents, helped by hopes that it would secure the much-needed extension. The value of its shares has been almost wiped out, collapsing from a 2011 peak after the company was faced with accusations of murky accounting, and hit with the impact of a broad commodity downturn.
The firm's market capitalisation has slumped from a peak of more than S$10 billion to just S$430 million. Noble Group's probability of default, implied by its five-year credit default swap (CDS), has been hovering at around 93 per cent since mid-May. The CDS curve is severely inverted, implying a very high chance of the company defaulting on its debt.