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Hot stock: Noble closes 6.6% lower after warning of US$1 billion Q3 net loss

Noble Group
Noble Group is selling its wholly owned subsidiary, Noble Americas Corp (NAC), to rival Vitol US Holding Co, in a deal that is expected to bring in cash proceeds of about US$582 million.

NOBLE Group's stock fell 6.6 per cent, or 2.5 Singapore cents, to close at 35.5 Singapore cents on Monday after the commodities trader warned of a US$1.1 billion to US$1.25 billion net loss for the quarter ended Sept 30.

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 before the market opened that adjusted net loss from continuing operations would fall between US$50 million and US$100 million, adjusted for exceptional items. Exceptional items and results from discontinued operations are expected to be about US$1.05 billion to US$1.15 billion as the company incurs losses and impairments related to its NAC businesses.

"The operating environment continues to be challenging for the group and this impacted performance in Q3 2017," Noble said.

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Noble also announced that it had reached terms to sell NAC, through which Noble had primarily conducted its global oil liquids business.

The consideration for the sale will be based on a number of variables, including the value of NAC's interests in Noble Petro and NAC's contracts.

Based on Noble's results as at June 30, the gross consideration of the deal would have been about US$1.42 billion if the deal had been completed on July 1, 2017, Noble said.

The group continues to be in discussion with its lenders, Noble added. The company has obtained an extension to Dec 20, 2017 from Oct 20, 2017 of a waiver received in relation to an unsecured revolving credit facility due May 2018.

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