Noble to sell oil liquids unit by year-end

Noble Group expects to sell its oil liquids business by the end of December as part of a plan to slim down drastically its core Asian coal trading business, the mainboard-listed company said in a statement yesterday.

In September, chairman Paul Brough told shareholders that the company had received second-round bids for the business and expected to announce a deal before the end of the month.

The company did not give any reason for the delay in the sale. The Hong Kong-based company is fighting for survival more than two years into a crisis marked by criticisms of its accounting.

The group remains under pressure after several turbulent years marked by losses, credit-rating downgrades and accusations of improper accounting that it has denied. Once Asia's largest commodity trader, the company's market value has shrunk to just US$400 million (S$540 million) from more than US$10 billion at the end of 2010.

Noble has US$2.6 billion in bank debt and bonds due in the next 12 months, Moody's estimated in August. The company has been trying to restore confidence among banks, counterparties and investors after securing a covenant waiver until Oct 20.

Noble's shares were hovering around 42 Singapore cents yesterday.

The group is slashing jobs and selling assets to shrink debt. It flagged the sale of the capital-intensive oil liquids business in July after agreeing to sell its North American gas and power business to rival Mercuria Group. Yesterday , it said it had completed the sale of the gas and power business. Reuters had reported that Mercuria Group, Vitol Group, the US-based Castleton Commodities International and Freepoint Commodities were among the parties interested in Noble's oil business.

The group remains under pressure after several turbulent years marked by losses, credit-rating downgrades and accusations of improper accounting that it has denied.

Noble previously said North American lenders to the company had extended the deadline for a US$2 billion credit facility by three months to Jan 15. It also plans to raise a further US$800 million to US$1 billion from asset sales, while a search for a "white-knight" investor continues.

REUTERS, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on October 03, 2017, with the headline 'Noble to sell oil liquids unit by year-end'. Print Edition | Subscribe