Noble shares gradually recovering from sell-off

SHARES of Noble Group were gradually recovering in early morning trading following a rebuttal by the group of fresh allegations raised by US shortseller Muddy Waters.

Despite opening lower on Friday morning, Noble shares were up 1.16 per cent or one cent to S$0.87 on active trade of 52.73 million shares at 11.05am.

The stock had plunged to as low as S$0.84 before ending Thursday at S$0.86, down 5.5 per cent on news that Muddy Waters questioned the group's accounting practices and shorted Noble shares. Muddy Waters' accusations came just two months after anonymous group Iceberg Research alleged accounting malpractices by Noble.

Before the market opened on Friday, Noble issued a line-by-line rebuttal of allegations raised by Muddy Waters, "categorically rejecting their allegations as inaccurate, unreliable and misleading".

Noble quashed the assertion that the group exists to borrow and burn cash. "In fact, our balance sheet has never been stronger. Furthermore, the time period of 20 years referenced by Muddy Waters has seen Noble grow from a company with US$377 million of revenue to revenues of more than US$85 billion."

The group also took issue with, among other allegations, the allegation that its debt levels are unsustainable, pointing to a historic low in debt-to-capitalisation at 38 per cent as at the end of 2014.