Noble Group's roller-coaster ride gathers pace with share price jump

[SINGAPORE] Noble Group rebounded in Singapore as the company's new rights shares began trading on the exchange, extending a roller-coaster ride ahead of quarterly results next week that'll shed light on the commodity trader's performance, funding and plans for asset sales.

The shares rallied as much as 12 per cent to 14.8 Singapore cents and traded at 14.3 cents at 11.58am local time. It eventually closed 9.8 per cent higher at 14.5 Singapore cents.

In the preceding two days, the stock lost 19 per cent, with a plunge on Tuesday that drew a query from the exchange. Hong Kong-based Noble Group said it was unaware of the reason for the move.

After a turbulent 2015 as the company posted losses, was cut to junk and saw its shares routed, Noble Group is facing further challenges this year even after wrapping up the one-for-one rights issue that raised about US$500 million.

The funding, which was supported by Chairman Richard Elman and China Investment Corp, will be used to repay borrowing and bolster operations. It's announced plans to raise more capital, with the pending sale Noble Americas Energy Solutions, an asset it once labeled as core.

The company is scheduled to report quarterly earnings on Aug 11, the first under the new leadership of co-chief executives Jeff Frase and William Randall, who replaced Yusuf Alireza.

The planned sale of NAES has "already generated significant interest" from potential buyers, Noble Group has said. It's appointed Morgan Stanley and HSBC Bank Plc to handle the disposal.

CREDIT FACILITIES

The Financial Times reported on Thursday, citing people that it didn't identify, that Noble Group is seeking a waiver for one of its debt covenants on US$3 billion of credit facilities, with the consolidated funded debt-Ebitda ratio expected to rise above an agreed limit in the second and third quarters. Noble Group declined to comment, according to the report.

Trading in Noble Group stock has topped the daily average this week. As of noon on Thursday, about 210 million shares had changed hands after volumes of 319 million on Wednesday and 336 million the day before.

The daily average in 2016 is about 94 million, according to Bloomberg data. In all after the rights issue, there are about 13 billion shares.

BLOOMBERG