Noble's cash call a one-year reprieve

Hong Kong

NOBLE'S cash call should buy it a year of breathing space. The embattled commodity trader is tapping its long-suffering shareholders for US$500 million, days after its chief executive resigned. Chairman Richard Elman has also announced plans to step down in the next 12 months. The main question for investors, however, is whether Noble's core business can consistently generate cash.

Ever since critics started challenging the Singapore-based company's accounting and financial position last year, investors have been speculating about a possible equity injection from an outside group. In the end, Noble appears to have concluded the best available option was to ask its existing owners for the money.