Noble sues Australian coal producers for alleged breaches

Singapore

NOBLE Group Ltd, the commodity trader seeking to push through a restructuring after losing billions of dollars and defaulting, has filed a claim in Australia against two coal producers for alleged breaches of contractual obligations under a marketing services agreement.

The Singapore-listed company, which will report another loss later this month, said a unit has filed the claim in the Supreme Court of New South Wales against Yancoal Australia Ltd and Gloucester Coal Ltd for damages estimated at at least US$127 million, according to an exchange statement on Friday.

After being locked in a battle for survival for years, Noble has secured approval from most of its senior creditors for the restructuring, as well as from about a third of its existing shareholders. The company's drawn-out crisis has prompted speculation that some of its suppliers may seek an opportunity to walk away from contracts, putting at risk Noble's ability to provide raw materials to customers in Asia. The claim relates to a marketing services agreement entered into in 2011.

"We're taking the appropriate time to review the claim and it's too early for us to provide any further comment at this time," James Rickards, Yancoal's general manager investor relations and corporate affairs, said by phone.

Noble remains a minor shareholder in Yancoal, according to Bloomberg data, after its holding was diluted.

Last week, Noble said it expects an overall net loss of US$115 million to US$140 million, driven mostly by restructuring expenses and finance costs for the quarter to June. Still, the trader also sees profit before interest, tax and restructuring costs of US$35 million to US$50 million in the period as operating income from supply chains covered expenses. BLOOMBERG