Noble Group

The main concern now, is the going concern, with its very-thin margin, vs the higher financing cost...

Noble chief faces tough questions
16 Apr 2016 09:00
By Wong Wei Han

Commodities giant Noble Group has made progress on bolstering its balance sheet but some shareholders are still not buying the turnaround story if yesterday's annual general meeting (AGM) is anything to go by.

About 390 investors turned up for the AGM at Suntec Convention Centre and all 15 resolutions, including the re-election of chairman Richard Elman as director, received a majority backing but there was also plenty of dissent expressed.

Chief executive Yusuf Alireza told the meeting that Noble had delivered on all its key priorities for the second half of 2015. It generated a positive cash flow of around US$651 million (S$887 million) in the period, reducing debt by around US$362 million and raising US$750 million in capital from the sale of Noble Agri.

But several shareholders still stepped forward to voice tough questions, including long-time investor Mano Sabnani, who felt the firm's business margin was too thin to be sustainable.

He asked: "How are you going to maintain margins going forward? Your operating income margin was around 1.76 per cent but your average cost of debt was 3.8 per cent. Can you assure us that your business model is still sustainable?"

Mr Alireza replied that more of Noble's future funding will rely on the cheaper secured financing. Margins will also gradually improve as smaller players are forced out of the market due to a lack of capital.

Meanwhile, Noble will have around US$4.6 billion in potential liquidity to service the US$3.2 billion debt due by the end of next year, he added.
...
Source: Straits Times

Massive price drop today after fitch put negative watch on its debt. 35c again

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(09-05-2016, 06:58 PM)BlueKelah Wrote: Massive price drop today after fitch put negative watch on its debt. 35c again

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hope to see 26c again !

A good summary of the credit analysis on Noble...

Fitch Ratings downgrades Noble to 'BB+' with stable outlook
17 May 2016 17:37
By Lynette Khoo

FITCH Ratings has downgraded the long-term issuer default rating of Hong Kong-based commodities trader Noble Group Limited to "BB+" from "BBB-" with stable outlook.

It also downgraded the senior unsecured ratings to "BB+" from "BBB-", and removed the ratings from Rating Watch Negative.

This reflects Fitch's expectation that Noble's debt structure is shifting towards shorter-term financing to complement its asset-light business model that focuses on working-capital management, and to reduce overall finance costs. This will result in a weakening debt maturity profile, which Fitch deems to be no longer consistent with an investment-grade rating.

The stable outlook reflects Noble's continuous improvements in its balance sheet and its commitment to maintaining sufficient liquidity to cover its working-capital needs, Fitch said in a note on Tuesday.
...
Source: Business Times Breaking News

Bye bye Alireza. Looks like no one wants to ride a sinking ship...

Noble must be pretty desperate to be selling assets in such bad times where they would probably get the worst valuations. Maybe they are having some real problems with cash flow now.

Noble Group Says CEO Alireza Resigns; Plans Sale of U.S. Assets

Commodity-trader Noble Group Ltd. said that Chief Executive Officer Yusuf Alireza has resigned and will be replaced by two co-heads. The company also announced plans to sell some of its U.S. operations.
“Mr. Alireza has helped guide Noble through a very challenging period, moving the company to an asset-light, merchant-focused model,” the Hong Kong-based company said in a statement to the Singapore stock exchange on Monday. He’ll be replaced by William Randall, Noble Group president, and Jeff Frase, president of Noble Americas. Richard Elman remains as chairman.
Noble Group “will shortly be starting the sale process for Noble Americas Energy Solutions, a transaction which is expected to generate both significant cash proceeds and profits to substantially enhance the balance sheet,” it said. “This is in addition to fund-raising initiative previously announced.”

Cash flow issues, are obvious. I reckon, the management didn't try to hide it.

The challenge is too "tough" for the CEO. Well, we usually see "true partners" only in tough time.

I wish the Chairman, all the best. I reckon he got the skills and determination to solve the issues, but luck plays an important part too.

(not vested)

The key now is how much for Noble Americas. The recent sale of noble agri resulted in an impairment loss of 724 mil.

And Iceberg has made allegations that Noble has been overstating its assets. If Noble America is being sold and further impairment losses have to be recorded, investors may start to wonder if this is true after all and it will affect confidence

Iceberg is zhun one lah, ex-employee leh, likely knows exactly what's going on behind the scenes

More losses coming.

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(30-05-2016, 12:56 PM)CY09 Wrote: The key now is how much for Noble Americas. The recent sale of noble agri resulted in an impairment loss of 724 mil.

And Iceberg has made allegations that Noble has been overstating its assets. If Noble America is being sold and further impairment losses have to be recorded, investors may start to wonder if this is true after all and it will affect confidence

Overstated assets are almost confirmed. I reckon, Mr. Market is looking at the solvency of the company, with focus on its cash flow.

(not vested)

(30-05-2016, 08:52 AM)BlueKelah Wrote: Bye bye Alireza. Looks like no one wants to ride a sinking ship...

Noble must be pretty desperate to be selling assets in such bad times where they would probably get the worst valuations. Maybe they are having some real problems with cash flow now.

Noble Group Says CEO Alireza Resigns; Plans Sale of U.S. Assets

Commodity-trader Noble Group Ltd. said that Chief Executive Officer Yusuf Alireza has resigned and will be replaced by two co-heads. The company also announced plans to sell some of its U.S. operations.
“Mr. Alireza has helped guide Noble through a very challenging period, moving the company to an asset-light, merchant-focused model,” the Hong Kong-based company said in a statement to the Singapore stock exchange on Monday. He’ll be replaced by William Randall, Noble Group president, and Jeff Frase, president of Noble Americas. Richard Elman remains as chairman.
Noble Group “will shortly be starting the sale process for Noble Americas Energy Solutions, a transaction which is expected to generate both significant cash proceeds and profits to substantially enhance the balance sheet,” it said. “This is in addition to fund-raising initiative previously announced.”

If the head is resigning, this is a strong negative sign.
It is hard to see Noble surviving this in the long run, and even if they do, it'll be a shade of it's former self.
The ironic thing is, the sale processes actually bring attention to their balance sheet and it seems that there are tons of bombs in the BS.
One must certainly question all the valuations in the BS and right now, it's hard to put an exact value to it.
I fear the cockroaches have still not fully emerged.