Reuters are reporting that trader Noble Group is expected to pick a buyer for its oil and LNG units by mid-September to cover debts and reduce credit exposure after a first half loss of US$1.9 billion.
Once Asia’s largest commodities trader, Singapore-listed Noble has slimmed down drastically to its core Asian coal business after a crisis-wracked two years.
Hong Kong-based Noble said in July it was selling its North American gas and power business to Mercuria and also said it would sell its capital-intensive oil liquids business, leaving it focused on hard commodities.
Suitors for the oil business have already signed non-disclosure agreements.
Noble’s US$2 billion credit facility expires in October, a date set by creditors after a four-month extension.
According to sources, Noble’s LNG business would be included in the sale. The company delivered 2 million t of LNG in 2015 after securing a deal to supply Egypt and contracts in the Asia-Pacific region.
Noble’s spokesman in Hong Kong said that the company had no plans to sell its LNG business. In an update of its strategic review in July, Noble had reiterated its focus on the LNG business, along with hard commodities and freight.
The sources, who did not put a value on the oil and LNG units, said interested parties included rival trading firms Mercuria Group, Vitol Group, US-based Castleton Commodities International and Freepoint Commodities, as well as Litasco, the trading arm of Russia’s Lukoil.
Noble’s market value has plunged by 90% from US$6 billion in February 2015 to just over US$400 million. Its shares are down about 70% so far this year.
Noble was put in the spotlight in February 2015 when Iceberg Research accused it of overstating its assets by billions of dollars, which Noble rejected, and the company was also hit by the downturn in commodities prices.
Noble has taken writedowns of more than US$2 billion since the start of 2016.
The firm has scaled back its risk positions. Ratings agencies S&P and Moody’s cut their credit ratings on Noble in August, citing high default risks, making it more challenging for Noble to secure trade finance.
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