Noble Group ends above theoretical ex-rights price
Counter was the most active, with some 226m shares changing hands
Singapore
NOBLE Group shares closed trading on Tuesday at S$0.18 apiece on an ex-rights basis. This was up 10.8 per cent from its theoretical ex-rights price of S$0.1625.
The stock of the beleaguered commodities group had closed at S$0.215 on Monday. Since its one-for-one rights issue was at S$0.11 per rights share, this worked out to the theoretical ex-rights price of S$0.1625.
The counter was the most actively traded with some 226 million shares worth S$38 million changing hands.
However, at S$0.18, the stock was still below the theoretical ex-rights price of S$0.205 based on the closing price of S$0.30 on June 2, the last market day before its rights issue was first announced.
In a separate announcement on Tuesday evening, substantial shareholder Orbis said it bought around 12 million shares last Friday, raising its stake from 9.88 per cent to 10.06 per cent.
Noble's US$500 million rights issue was overwhelmingly approved by shareholders last Friday.
Noble's executive chairman and founder Richard Elman deemed the cash call as an important next step for the company to reposition its balance sheet. He is taking up 9.58 per cent of the rights shares, less than his full entitlement, while sovereign wealth fund China Investment Corp's subsidiary Best Investment Corporation has undertaken to subscribe for its full entitlement of 9.65 per cent.
Noble plans to use the proceeds to cut debt and for deployment into high-return businesses.
The exercise, together with the sale of Noble Americas Energy Solutions, is expected to raise US$2 billion in additional liquidity for the ailing group.
After a tortuous 2015 which saw Noble's finances attacked by critics (chiefly, Iceberg Research) and a commodity slump that hurt its business, this year has been no less injurious for the firm.
In March this year, Noble was booted out from the vaunted 30 stocks that weigh in on the local bourse's key Straits Times Index and was replaced by CapitaLand Commercial Trust.
The loss of its blue chip status, amongst others, had considerably weakened sentiment in the street towards the stock. Credit rating agencies have shown little mercy - all three big agencies have cut its rating to "junk" - with the latest blow coming from Standard & Poor's; for the second time in six months, S&P's slashed the rating on Noble's debt deeper into junk territory on the back of its waning liquidity position.
The departure of Noble's chief executive Yusuf Alireza and the stepping down of Mr Elman (within the next 12 months) as chairman which was announced in quick succession last month had stunned the market, causing unease over the firm's future.
All of that has hit its stock price and dragged it further away from the pre-rights levels it stood at a year ago of 76 Singapore cents - and more starkly, even farther away from three years ago when the stock was trading at over S$1.
With additional reporting by Cai Haoxiang
