Noble unit sells stakes in 4 UK power firms for at least US$23.5m

A MAJORITY-OWNED subsidiary of commodity trader Noble Group has sold off all of its interests in four power companies incorporated in the UK for at least US$23.5 million in cash, with an additional consideration of up to, but an unlikely, US$91.6 million.

The group said in a filing to Singapore Exchange on Tuesday morning that the company's 75 per cent owned subsidiary, Watt Power, has disposed of its entire 100 per cent equity interests in the four wholly owned power development companies to Drax Developments, a subsidiary of Drax Group, for an initial consideration of approximately US$23.5 million.

The four companies are Abergelli Power Limited (APL), Hirwaun Power Limited (HPL), Millbrook Power Limited (MPL) and Progress Power Limited (PPL).

There is an additional consideration payable dependent on the clearing price in future UK capacity market auctions of up to a maximum of about US$91.6 million, Noble added.

However, this will depend on the outcome of the UK capacity market auctions during the period of 2016 to 2020 and the actual quantum paid may be significantly lower than the stated maximum quantum, it noted.

The disposal will also result in outstanding bid and other security of approximately US$7.2 million being returned to Watt Power.

The consideration will be satisfied in cash and was arrived at after arm's length negotiations on a willing-buyer, willing-seller basis.

Based on the latest unaudited consolidated financial statements of Noble for the quarter ended Sept 30, 2016, the book value attributable to the sale shares and the net tangible asset value attributable to the sale shares of each of APL, HPL, MPL and PPL was approximately US$0.8 million, US$3 million, US$0.8 million and US$3 million respectively.

Noble's counter last traded on Monday at S$0.167, 0.6 Singapore cent higher than on the previous trading day.