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Noble rebuts Muddy Waters' allegations
NOBLE Group has issued a line-by-line rebuttal of allegations raised by Muddy Waters, "categorically rejecting their allegations as inaccurate, unreliable and misleading".
This rebuttal came in the wake of a fresh attack by US short-seller Muddy Waters, which said it took a short position on the stock and hurled fresh criticism of its finances and management, just two months after anonymous group Iceberg Research spotlighted Noble's alleged accounting malpractices.
Noble said it rejects 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."
Also rejecting the notion that Noble's debt levels are unsustainable, Noble flagged that its debt-to-capitalisation as at the end-2014 was at a historic low of 38 per cent with US$5.2 billion of liquidity headroom. In terms of its debt profile, half of the outstanding debt has a maturity of over two years.
Noble also rejected the assertion that intra-quarter debt levels increased by US$3 billion. "We acknowledge that our debt does fluctuate intra-quarter, however this is more a reflection of market practice, and nowhere near the US$3 billion claimed," it said.
Noble noted that allegations by Muddy Waters that it misled investors or manipulated the accounting in the acquisition and disposal of PT Alhasanie are unfounded. Over US$40 million has been achieved in direct cash gross profits on sales from the mine, underpinning the asset value, Noble said.