Noble sinking in ‘a perfect storm’, says Iceberg

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