Noble's ballooning debt seen raising restructuring risk

Hong Kong

NOBLE Group Ltd's rising debt load is adding to speculation that it will need to restructure its obligations, even after the embattled commodity trader obtained a crucial covenant waiver that buys it more time.

"Noble's current capital structure is not sustainable," said Annisa Lee, head of Asia ex-Japan flow credit analysis at Nomura International (Hong Kong) Ltd. "It is still my base case that it will have to go for restructuring or liquidation eventually."

The company is fighting for survival more than two years into a crisis punctuated by accounting criticisms and a collapse in its securities. It reported a US$1.75 billion loss for the second quarter on Thursday and announced that it would retreat to its Asian roots by selling its gas and power unit. Noble Group, which was founded by chairman-emeritus Richard Elman, has lost more than 90 per cent of…