Personally NOBLE is gone.....
Noble seeks debt waiver from lenders
Commodity trader faces risk of breaching covenant on $1.1bn credit line
YESTERDAY by: Neil Hume, Commodities and Mining Editor
Noble Group, the Hong-Kong based commodity trader, has asked lenders to waive a debt covenant tied to a $1.1bn credit line that matures next year while it continues work on a plan to recapitalise the business.
Noble wants the banks to set aside the condition on the borrowing facility given the risk that a measure of net debt to earnings before interest, tax, depreciation and amortisation could rise above an agreed limit this year, according to people with knowledge of the discussions.
The approach to lenders comes just weeks after the crisis-hit trader was granted a four-month extension to repay or refinance another credit line.
Noble declined to comment on discussions with its lenders. Credit investors said they expected Noble’s lenders to grant the waiver.
Founded in the 1980s by former metals dealer Richard Elman, Noble rose to become one of Asia’s biggest commodity traders, helping to meet China’s seemingly insatiable appetite for raw materials.
But in recent years the company, which acts as a middleman for coal, iron ore and oil deals, has been hit hard by a downturn in commodity markets amid questions about its accounting.
Noble’s market value has collapsed to $600m from more than $11bn at its peak in 2011 as investors and analysts have doubted management’s ability to turn around the business.
In May, Noble announced a first-quarter loss of $130m, which it blamed on a “challenging” operating environment and unusual movements in the coal market. It also reported a 14 per cent increase in net debt to $3.29bn.
Over the past year, Noble has sold businesses, raised money from shareholders and replaced its chief executive. It has also been searching for a strategic investor to help recapitalise the business and manage its debt load. The company must repay or refinance $2bn of debt and loans over the next year.
But so far it has failed to find an investor and some analysts believe it will have to sell parts of its oil unit, one of its core operations. Paul Brough, who took over as chairman in May from Mr Elman, is leading a strategic review of the entire business.
Shares in Noble leapt 36 per cent to S$0.64 cents on Thursday on speculation that Noble had launched a formal sale process for its US oil division.
Noble, however, said it was not aware of any reason for the price rise in response to an inquiry from the Singapore stock exchange, where its shares are listed. The Financial Times reported in June that Noble had received unsolicited approaches for its oil business from industry rivals.
Even after Thursday’s rise, Noble shares are still down more than 90 per cent since early 2015 when Iceberg Research, a previously unknown research group, produced the first in series of reports highly critical of the company. Noble has always defended its accounting.
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