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Updated hot stock: Noble halts trading after tumbling on reports of Sinochem's withdrawal, S&P's warning

Tuesday, May 23, 2017 - 09:22

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NOBLE Group has requested for an immediate halt in the trading of its shares after they tumbled when the stock market opened on Tuesday, a day after Reuters reported that China's state-owned Sinochem was no longer interested in investing in the commodity group due to concerns over its finances and business outlook.

Noble opened at S$0.475 a share and sank quickly to S$0.400, before trading around S$0.420, down 16.50 Singapore cents, or 28.205 per cent, by 09:36am, before the company requested a halt in the trading of its shares.

A staggering 79 million shares changed hands, prompting a query from the Singapore Exchange (SGX) on its trading activity.

Reuters reported late Monday that Sinochem became cautious about buying a stake in Noble after the trader posted a shock quarterly loss this month, sparking a rout of its shares and bonds and triggering cuts in outlooks by rating agencies, including S&P Global Ratings.

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The latter has cut its long-term rating on Noble by three notches to CCC+ from B+ and warned of more trouble ahead.

"The negative outlook on Noble reflects the potential that the company will face distress and a non-payment of its debt obligations over the next 12 months," S&P said.

S&P said Noble has three major maturities over the next 12 months, listing US$656 million due in 2017, of which US$620 million are borrowing-base facilities due in June 2017; US$379 million under a medium-term note program due in March 2018; and US$1.1 billion in revolving credit facilities due in May 2018. Beyond that, there are bonds due in 2020 and 2022.

S&P's warning came in the wake of other downgrades. Moody's Investors Services downgraded Noble further into junk territory last Monday, while Fitch cut its long-term rating on the company from BB- to BB+ on Wednesday.

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