{"id":48248,"date":"2017-10-23T07:10:10","date_gmt":"2017-10-23T07:10:10","guid":{"rendered":"https:\/\/www.biphoo.com\/bipnews\/?p=48248"},"modified":"2017-10-23T07:10:10","modified_gmt":"2017-10-23T07:10:10","slug":"noble-group-to-sell-oil-liquids-unit-to-vitol-flags-1-2-billion-loss","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/business\/noble-group-to-sell-oil-liquids-unit-to-vitol-flags-1-2-billion-loss.html","title":{"rendered":"Noble Group to sell oil liquids unit to Vitol flags $1.2 billion loss"},"content":{"rendered":"

Noble Group to sell oil liquids unit to Vitol flags $1.2 billion loss<\/span><\/strong><\/span><\/h2>\n

Noble Group to sell oil liquids unit to Vitol flags $1.2 billion loss: Monday\u2019s move came after Reuters reported late on Friday that Vitol, the world\u2019s largest oil trader, was nearing a deal to buy Singapore-listed Noble\u2019s oil liquids unit.<\/span><\/p>\n

Once Asia\u2019s biggest commodities trading house, Noble is slashing jobs and selling assets to reduce its debt and win support from its lenders after a crisis-wracked two years. In July it agreed to sell its smaller gas and power business to Mercuria as it focuses on its core Asian coal trading and LNG businesses.<\/span><\/p>\n

Annisa Lee, Nomura\u2019s head of Asia ex-Japan\u2019s flow credit analysis, said the asset sale was expected and the \u201clonger-term concern\u201d was the ongoing operating losses.<\/span><\/p>\n

\u201cI guess the question is when are they going to basically turn around their business, which is quite key. If they can actually provide more details, what sort of assets they can still sell, that would be great,\u201d she said.<\/span><\/p>\n

Hong Kong-based Noble was plunged into crisis in February 2015 when Iceberg Research questioned its accounts, and then the company was hit by a commodities downturn.<\/span><\/p>\n

While Noble has stood by its accounts, the upheaval triggered a share price collapse, credit downgrades, a series of writedowns, as well as fund raising and management changes. Noble\u2019s market value has plummeted to less than $400 million from $6 billion in February 2015.<\/span><\/p>\n

Noble warned of a total net loss of $1.1 billion to $1.25 billion in the three months ending September, citing non-cash losses and underlying trading results. This follows a $1.75 billion net loss reported in April-June.<\/span><\/p>\n

In July, it announced an up-to-$1 billion disposal plan for assets outside North America over the next two years as Chairman Paul Brough, a restructuring specialist appointed in May, sought to tackle Noble\u2019s more than $3 billion of debt.<\/span><\/p>\n

\u201cConservative liquidity management and constraints placed on the group\u2019s access to trade finance lines led to disruption costs and prevented the group from taking advantage of profitable trading opportunities,\u201d the company said.<\/span><\/p>\n

Its stock fell 10 percent on Monday, extending losses to 80 percent this year.<\/span><\/p>\n

NEGOTIATIONS WITH LENDERS<\/span><\/p>\n

Noble has been locked in negotiations with its core lenders to support a $2 billion credit facility, secured on its inventories and working capital.<\/span><\/p>\n

\u201cWhilst no assurance can be given as to the outcome of these discussions, the group believes that these are open and constructive, and are moving forward,\u201d it said.<\/span><\/p>\n

Noble said the gross proceeds from the proposed sale of its oil liquids business would be $1.4 billion, and after deducting indebtedness of about $836 million, the cash proceeds would be about $580 million.<\/span><\/p>\n

In August, ratings agencies S&P and Moody\u2019s cut their credit ratings on Noble, citing high default risks.<\/span><\/p>\n

Noble is a big player in the global physical oil market, trading crude and refined products. But its operations shrank this year due to higher prices and liquidity constraints. The company has blending and wholesale capabilities in North America and the Caribbean, alongside long-term storage leases globally.<\/span><\/p>\n

A purchase of Noble\u2019s oil liquids business will reinforce Vitol\u2019s position as a leading oil trader.<\/span><\/p>\n

Source:http:\/\/www.reuters.com\/article\/us-noble-grp-restructuring\/noble-group-to-sell-oil-liquids-unit-to-vitol-flags-1-2-billion-loss-idUSKBN1CR0ZH<\/span><\/p>\n

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