Noble Group considers selling oil arm

HONG KONG, June 12, 2017 – The oil trading business of Hong Kong-based commodities trader Noble Group, which has been struggling to refinance in recent months, has attracted interest from rivals, international media reported on Monday.

Noble is facing some USD 1.5 billion of maturing bonds and loans in the next year, including USD 600 million from a USD 2-billion loan facility that expires this month, the Financial Times reported.

The valuation of the once-flourishing company, worth as much as USD 14 billion in 2011, has plunged to about USD 280 million today following a drop in commodities markets and an accounting scandal, with bonds trading USD 0.37 to the dollar, the report added.

In May, the company posted an unexpected first-quarter loss of USD 130 million and said it was likely to remain unprofitable until 2019. Following the announcement, S&P Global Ratings downgraded the firm’s credit rating to CCC+ and warned of a risk of default within the year.

While a sale of its oil arm, which made a profit before tax of USD 91 million last year, would offer the embattled company an alternative to its unsuccessful search of a strategic investor, industry sources say the chance of a bankruptcy is also high.

“Noble has appointed the most active and aggressive restructuring advisers,” an anonymous secondary loan trader told Reuters. “The view from the market was that if they were hiring those guys, things must be pretty bad.”

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