Noble Group loses key bank prop as DBS cuts loans

SINGAPORE: Noble Group Ltd, the commodity trader fighting for survival, lost support from one of its key banks as Singapore’s DBS Group Holdings Ltd cut lending, according to a source. Shares fell.

DBS sold its US$60mil stake in Noble’s US$1.1bil revolving credit facility due in May next year, and also closed some other financing to the company, the source said. It’s unclear whether the bank still has any remaining credit exposure to the trader.

The withdrawal by a core bank is the latest blow to Noble as it moves towards an all-but inevitable debt restructuring, battered by losses of more than US$3bil so far this year. The move by DBS to cut its exposure to Noble was first reported by Debtwire.

DBS had been a key supporter of Noble through a crisis at the Hong Kong-based trader that’s run for more than two years. Noble chairman Paul Brough recently mentioned DBS together with Societe Generale SA and ING Groep NV for having helped support the company through a crisis of confidence following its announcement of a surprise first-quarter trading loss.

On an August earnings call, Brough highlighted “the great support we received from my bilateral banks, SocGen, ING and DBS” as having been key to securing sufficient trade finance to support Noble’s Asian business – the part of the company that remains after the sale of its US-focused oil unit to Vitol Group.