Struggling Noble sacrifices American trading business

Struggling Noble sacrifices American trading business”

Noble Group, the contending commodities trader accorded in selling its oil trading business to that's Americas-focused, to Vitol by nearly $580 million as a part of the strategy for debt-cutting, and is warned of a huge loss for its third quarter.

Hong Kong-based Noble was plunged into crisis in February 2015 when Iceberg Research questioned its accounts, and then it was hit by a commodities downturn.

Yesterday's move came after Reuters reported late on Friday that Vitol, the world's largest oil trader, was nearing a deal to buy Noble's oil liquids unit.

Noble must repay $1.5 billion of bonds and banks loans by May 2018.

The commodities trader announced those numbers as it finalised terms to sell wholly owned subsidiary Noble Americas Corp (NAC) to rival Vitol US Holding Co, and said that it had received an extension of time on a revolving facility.

Noble said in a statement that it expects a total net loss in the quarter ending September 30 of between $1.1 billion and $1.25 billion, after reporting a heavy loss of $1.75 billion in the second quarter.

Noble also stated that the gross proceeds from the business of selling its oil liquids would be $1.4 billion, and after deduction of debt of about $836 million, proceed in cash would be around $580 million. Its stock is down about 80 percent this year.

"They're still fighting to survive", said Mr Nicholas Teo, a trading strategist at KGI Securities (Singapore).

"The operating environment continues to be challenging for the group and this impacted performance in (the third quarter of) 2017", Noble said.

The deal for the oil business, one of Noble's most valuable remaining assets, follows the sale of a smaller gas-and-power trading unit to Mercuria Energy Group that was completed last month.

"Conservative liquidity management and constraints placed on the group's access to trade finance lines led to disruption costs and prevented the group from taking advantage of profitable trading opportunities", the company said on Monday.

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