Noble sink­ing in ‘a per­fect storm’, says Ice­berg

New Straits Times - - Business -

SIN­GA­PORE: Noble Group Ltd has re­ceived a fresh broad­side from Ice­berg Re­search as the com­mod­ity trader’s long-time foe pre­dicted that the com­pany will prob­a­bly fail, while telling ex­ec­u­tives that the anony­mous com­men­ta­tor will not be si­lenced by be­ing sued.

The trader’s shares fell.

“Noble is sink­ing in a per­fect storm,” said the re­searcher in a re­port yes­ter­day. “The com­pany is walk­ing to­wards bank­ruptcy and liq­ui­da­tion. Its cost of fund is pro­hib­i­tive. Noble is los­ing the con­fi­dence of its coun­ter­par­ties and of its banks. Key traders are leav­ing.”

Ice­berg Re­search, which doesn’t iden­tify its an­a­lysts, has been spar­ring with the Hong Kong-based com­pany for more than two years. The trader has re­peat­edly de­nied Ice­berg’s al­le­ga­tions.

Once Asia’s largest com­mod­ity trader, Noble Group has been in de­cline since 2015, marked by losses, con­cerned it won’t be able to pay its debt, and ac­cu­sa­tions from Ice­berg that it in­flated the value of some con­tracts.

Last week, the com­pany warned of a quar­terly loss of as much as US$1.8 bil­lion (RM7.7 bil­lion) — in­clud­ing im­pair­ments of some hard-to-value con­tracts — and an­nounced more as­set sales.

Moody’s In­vestors Ser­vice Inc says the risk of de­fault is el­e­vated.

“Noble ex­pects a mas­sive loss of US$1.8 bil­lion in its sec­ond quar­ter,” said Ice­berg, adding that the ar­gu­ments it made against the com­pany had been con­firmed. It needs “bil­lions from a new in­vestor to re­pair its bal­ance sheet and re­verse its huge op­er­at­ing cash out­flow”, said the re­searcher.

Noble shares de­clined af­ter the re­lease of Ice­berg’s re­port, trad­ing 3.8 per cent lower at S$0.38 (RM1.20) by 2.01pm. Bloomberg

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