Noble Group shrinks as it sells part of business, with quarterly loss close to US$2 bn
Once Asia’s largest commodities trader, Hong Kong-based Noble falls on hard times
Noble Group, once Asia’s largest commodities trader, is to cut staff and sell assets, including its US gas and power business to Mercuria Energy Group, as it faces a quarterly loss of up to US$1.8 billion.
Hong Kong-based Noble added that it would “explore strategic alliances in Asia” with Mercuria after establishing some initial links with the Swiss trader’s Asian affiliates.
Noble announced on Wednesday the plans to sell its US gas and power business to Mercuria for US$248 million and has also put its capital-intensive oil liquids business up for sale, leaving it focused on “hard commodities”, essentially coal.
Singapore-listed Noble has struggled to repair investor confidence following setbacks over the past two years: first blogger Iceberg Research questioned its accounts in early 2015, and then it was hit by a sharp commodity market downturn.
The company has stood by its accounts. But the upheaval meant a collapsing share price, credit downgrades, management changes and asset sales. Noble’s market value has shrunk to US$554 million, from US$6 billion in February 2015.
Wednesday’s announcement marks Noble’s latest move to restructure to help it repay debt and keep trading. It also announced an up-to-US$1 billion disposal plan for assets outside North America over the next two years.