Noble Group and Korean fund link up
Noble Group plans to seek joint investment opportunities with South Korea's sovereign wealth fund after the Korea Investment Corporation (KIC) took a stake in the Hong Kong-headquartered, Singapore-listed commodities group.
The corporation acquired its interest of about 1.2 per cent following the purchase of 59,283,851 shares from Noble Holdings, which is linked to Noble founder and chairman Richard Elman.
No details of the price have been given, although the stake was worth about S$132.2 million (HK$833 million) based on the stock's closing price on Friday. The deal made KIC Noble's 10th largest stakeholder based on shareholder rankings in the firm's 2010 annual report.
Under a strategic agreement signed between the two organisations Noble said it planned to establish a 'co-operative business and strategic partnership for the purposes of jointly investing in infrastructure assets and supply chain management activities'.
No details of the proposed investments were given although KIC has traditionally invested in bonds and equities.
But KIC said the 2008 financial crisis gave rise to the possibility of making alternative investments including merger and acquisition opportunities that would 'realise mid- to long-term returns by maximising strategic and financial gains on acquisitions'.
The deal also meant KIC became the second sovereign wealth fund to invest in Noble after China Investment Corporation paid US$850 million, equivalent to S$2.11 per share, to acquire 573 million shares in September 2009.
The purchase comprised 438 million shares that were newly issued by the company and 135 million shares from trusts associated with Elman.
At the time, Noble said: 'CIC and Noble have agreed to enter into this partnership for the purpose of jointly investing in infrastructure assets and supply chain management related to agricultural commodities.'
Speaking after the firm's 2010 results announcement on February 28, Noble chief executive Ricardo Leiman said: 'CIC is our second largest shareholder; we have a very strong relationship with them. And we are co-operating, and have co-operated in many different fronts with them, and we will continue to do so on a mutually beneficial perspective.'
'We're looking at different opportunities with CIC,' he said, without giving further details.
Following the KIC deal, Noble Holdings, a discretionary trust whose beneficiaries include Elman's children, will remain Noble Group's largest shareholder with a 21.34 per cent interest.