Noble Group sells US energy business
BELEAGUERED Asian commodities trader Noble Group has agreed to sell its North American energy business to US power generator Calpine Corp for US$1.05 billion.
The Singapore-listed firm said the sale brings it closer to completing an initiative to raise $2 billion in capital as it strengthens its finances to turn the company around.
The Hong Kong-based company, which has strong links to China, is trying to restore investor confidence after a plunge in commodities prices last year hammered shares and led to a credit ratings downgrade.
It had also faced allegations by little-known Iceberg Research of irregular accounting practices.
In a statement to the Singapore Exchange, Noble Group said it sold its Noble Americas Energy Solutions (NAES) subsidiary to Calpine for $800 million, plus $248 million as repayment for the US unit’s working capital.
“The sale of NAES substantially completes the $2 billion capital-raising initiative that we announced in June,” co-chief executives Jeff Frase and Will Randall said.
“With this divestiture, Noble will continue to reduce debt while also funding growth opportunities in our high-return businesses.”
CMC Markets Singapore analyst Margaret Yang said that the sale “largely alleviated the concerns of a liquidity squeeze that the company has faced during [the] commodities slump, and may aid in Noble Group’s turnaround”. –