Trading in Noble shares halted as default warning fuels 28 per cent dive
SINGAPORE: Trading in embattled commodities firm Noble Group was halted yesterday after it plunged almost a third to a 16-year low in reaction to a warning from Standard & Poor’s that it faced a possible debt default.
The once-mighty company has been hammered in recent years as plunging commodity prices dismantled its bottom line while it has also suffered a ratings downgrade and allegations of irregular accounting practices.
Late Monday ratings agency S&P said the Singapore-listed firm risked defaulting on its debts in the next 12 months if losses continued and profitability was not restored. It also downgraded its ratings by three notches.
“Noble could face liquidity shortfalls in the next 12 months if the Hong Kongbased commodity trading company continues to make losses and it is unable to stabilise its profitability,” the agency said.
“The negative outlook on Noble reflects the potential that the company will face distress and a non-payment of its debt obligations over the next 12 months.”
Noble needs US$2 billion in credit ahead of the maturity next month of US$620 million in loans under an existing facility.
Shares in the firm collapsed as much as 32 per cent in a blistering half-hour sell-off after the open, prompting a trading halt.
It was down more than 28 per cent at S$0.42 by the time trading in the firm finished – lows not seen since 2001.
The trading halt was called pending an announcement, Noble said.
The company reported a loss of almost US$130 million in the first quarter and said it would not return to profitability until at least 2018-2019.
Its stock has been plunging since mid-2014 – shedding more than 80 per cent – as commodities prices were hit by a worldwide supply glut, weak global demand and slowing growth in key market China.