Noble Group Reports Loss, Restructuring Continues
Struggling Noble Group swung to a quarterly loss and flagged a debt reduction as the commodities trader shut some of its low-return businesses to help cope with a brutal commodities downturn and regain investor confidence.
The Hong Kong-based company said it expects to complete this restructuring by the end of the year and highlighted the formal sale process of its U.S. retail energy unit.
"Interest in the sale has been strong and we are now entering the latter stages of the process, with completion expected in a couple or so months' time," founder and Chairman Richard Elman said in a statement on Thursday.
"As we receive the proceeds from these various initiatives, our growth businesses will be able to get onto the front foot once more, as liquidity constraints ease and we focus on looking to the external markets and developing our businesses."
Noble's troubles started 18 months ago when its accounts were questioned by Iceberg Research, sparking a dramatic collapse in its share price and ratings agency downgrades, forcing a sale of its assets to allay financing worries.
CEO Yusuf Alireza, a former Goldman Sachs Asia co-head, quit unexpectedly in late May after helping Noble secure $3 billion in credit facilities and within days, the company announced a $500 million cash call.
Also, Elman, 76, who grew Noble into one of the world's biggest traders of commodities from coal to iron ore to oil in a bull run since setting up the group in 1986, said in June he will step down within 12 months.
On Thursday, Noble reported a 32 percent fall in revenue to $12.5 billion in the quarter ended June and swung to a net loss of $54.9 million from a profit of $62.6 million a year ago.
Net debt rose to $3.92 billion in April-June from $3.69 billion a year ago. The company said it received a waiver from banks relating to one of the financial covenants in its revolving credit facility and borrowing-base facility for the past quarter.
Noble's shares have fallen by about 90 percent since mid-Feb 2015.
Reporting by Anshuman Daga
