Noble Group

[Temperament]

"referring to the possibility that the company can claw back the losses if commodity prices improved."
Ha! Ha!
Me was "employed" on commission basis by a Hong Kong commodities Brokerage after taking their in house training. It was very popular/new at that time. That was when i was about 20+. The Boss/Owner was a Super Duper Motivational Speaker. Every morning all commodities saleman/traders(me included) were given motivational talk by him before we went out to look for clients(usually cold calls to set up appointment with potential clients). From my insider observations, all clients would lose their money in the end while the traders/saleman made good money from trading on behalf of the clients. The longer the account existed, the more trades done, the richer the trader/saleman was; Very, very few clients realized the danger of trading and pull out in time.
Till today i think commodities trading is really speculation for retailers. And definetly retail traders are at a disdvantage to the Big commodities brokerages. Ha! Ha!

[dydx]

Noble has started buying back its own shares.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument [14Nov announcement: 21.8m shares bought at average $1.1886/share]
http://info.sgx.com/webcorannc.nsf/Annou...endocument [15Nov announcement: 3.621m shares bought at average $1.2070/share]

It is relevant to note that so far Noble has spent $29.36m of additional borrowed money to buy back its own shares. Based on the lastest 3Q results.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument [results announcement]
, as at 30Sep11, Noble had a total nett borrowings of a massive $5.307b (derived from total debts of $7.095b, less "cash and cash equivalents" balance of $1.788b) - giving a gearing of 1.06x against an Equity of $5.021b - but before accounting a $5.375b total balance under "trade and other payables and accrued liabilities".

Can Noble really afford to buy back its own shares?

[weijian]

Based on it's latest statement, it is paying interest rates of ~5-8.5% on its bonds.
It's EPS is ~10cents now. Based on price=1.20sgd, yield is ~ 0.1/1.2 = 8%..

So, it is not really a good deal....Maybe the chairman (the founder who bought 10mil shares 2-3days ago) sanctioned this sharebuyback, in order to protect his own 20+% ownership?

[Musicwhiz]

Business Times - 16 Nov 2011

Hock Lock Siew
Can Noble convince investors it is back on track?

By FELDA CHAY

REPORTS that Noble Group is talking to former Goldman Sachs Asia-Pacific co-president Yusuf Alireza to head the company, as well as a share buyback undertaken by the group on Monday, appear to have done little to lift market confidence in the company. And there are very good reasons why investors are wary, given the double whammy it delivered last week.

On Thursday, the commodities trader surprised investors by reporting a third-quarter loss of US$17.5 million - its first quarterly loss in 14 years. It then dropped another bombshell: that the man it placed in the position of chief executive as recently as January last year had decided to step down.

The market's response to the two shocks was swift and furious. Noble's shares fell 26.5 per cent on Friday, wiping $2.8 billion off its market value. And it hasn't recovered by much since its great fall. At yesterday's closing price of $1.195, the stock has recovered just 1.5 cents from last Friday's close of $1.18.

Market talk has it that what really got investors jittery was the resignation of Ricardo Leiman from the CEO post, which comes at a time when management stability is key, given the tumultuous global economic environment, the quarter of losses, and that Noble is trying to hive off its agriculture assets for a separate listing - which it says is still on track.

Noble must have known this, and this may also be why it has very quickly engaged in talks with a big gun to lead the company. But it will take more than just talks, or even the hiring of Mr Alireza or another individual as CEO, to convince investors that the company is back on track.

This is because Noble has seen a string of key management departures since founder Richard Elman decided it was time to hand over the reins of the business almost two years ago and take a back seat in the organisation.

After vacating the CEO position for Mr Leiman, the founding father of Noble stepped down as executive chairman in September last year and was replaced by Tobias Brown - previously a non-executive chairman of the company. The position of chairman emeritus was then created for Mr Elman.

Mr Brown lasted just two months as executive chairman. In an announcement to the Singapore Exchange, Noble said that his resignation arose from 'the practical realities of running Noble with both an executive chairman and a CEO'.

Noble then said that it will 'identify a suitable candidate as a new non-executive chairman'. In the meantime, Mr Elman would assume that role - which he holds to this day.

Then in January this year, two months after Mr Brown's departure, Noble's long-time chief financial officer Stephen Marzo resigned.

What Noble needs to prove now, therefore, is that it can hire the right people to form its management team and also keep them. The company is now back at square one in trying to find a successor to the 71-year-old Mr Elman, who is now also interim CEO. What he needs to do right now is to ensure that a cohesive and strong team is formed quickly that can lead Noble in the years - and not just months - to come.

And given the perception that he is not one to readily delegate responsibility - as the changes within Noble's top ranks suggest - perhaps the greatest favour Mr Elman can do for the company is also to really do what he said he would: take the back seat as Noble goes forward.

[dydx]

Noble closed at $1.12 today (18Nov11, Friday), despite the company buying back its own shares, the last attempt of which was on 15Nov11.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument [16Nov announcement: 8.5m shares bought at average $1.1974/share]

Under the present circumsatnces - including prevailing weak stock market sentiment - it is no easy task for Noble to re-build market confidence.

[egghead]

Written by The Edge
Friday, 23 December 2011 08:02

Singapore-listed commodities firm Noble Group said on Friday it will make a one-time gain of about US$200 million ($259 million) from a proposed merger between its subsidiary Gloucester Coal (GCL.AX) and the Australian unit of China's Yanzhou Coal Mining Co, reported Reuters.

The deal, announced in Australia late on Thursday, will create one of Australia's largest listed coal companies. Noble and its units together own about 64.5% of Gloucester.

Noble said in a filing to the Singapore stock exchange that it will receive about 130.9 million Yancoal Australia shares and A$420 million ($551 million) under the terms of the proposed merger.

"Based on information the group has to date, the group estimates its gain on the disposal to be approximately US$200 million," the Singapore-listed firm added.

Noble said it plans to reinvest the cash proceeds from the proposed merger in its global businesses.

[mrEngineer]

Very smart move. Unlock value on the 14.5% and get extra cash, hide all unwanted liabilities into off balance sheet due to JV structure and only need to report using equity method, increase synergy due to involvement of expert player and maybe logistical or reserves management.

[Musicwhiz]

Business Times - 10 Jan 2012

Yanzhou bid for Gloucester Coal has 'big chance' of success

(SHANGHAI) Chinese miner Yanzhou Coal Mining Co's A$2 billion (S$2.65 billion) bid to take over Australia's Gloucester Coal has a big chance of success, financial adviser UBS said yesterday.

'We feel that Gloucester is already a listed company and its parent is also a listed company, in Singapore. There should be few obstacles and the chance of success is very big,' David Chin, UBS head of investment banking, Asia, told media in Shanghai.

Yanzhou Coal said in late December that it plans to merge its Australian unit with Gloucester Coal in a deal that would create one of Australia's largest listed coal companies.

Gloucester's major shareholder Noble Group backed the proposed deal.

The deal is another case of a Chinese company buying up natural resource assets in Australia, tapping its commodity base to fuel massive residential, commercial and infrastructure projects across China.

UBS's Mr Chin forecast that overseas resources would continue to be the main acquisition targets by Chinese firms, but Chinese interest in foreign industrial companies is also increasing. 'We feel that there would be more and more outbound acquisitions in the industrial sector,' he said, adding that it was a pity that China's Pangda Automobile Trade Co failed to buy Swedish car marker Saab after General Motors blocked the deal.

Mr Chin also sees more and more Chinese entrepreneurs willing to give up control of the companies they founded, creating more opportunities for foreign investors. - Reuters

[Musicwhiz]

Business Times - 18 Jan 2012

Noble Group keeping eye on build-up of counterparty risk

By JAMIE LEE IN HONG KONG

NOBLE Group is watching for a build-up of counterparty risk but has dismissed the idea that a lack of risk management caused the surprise loss in its third- quarter earnings, founder Richard Elman said here yesterday.

The giant commodities trader last November posted a quarterly net loss of US$17.5 million for the three months ended Sept 30, 2011 dragged down by unrealised mark-to-market losses mostly linked to the cotton market.

Farmers had defaulted on their contracts, prompting Noble to buy cotton in the spot market at elevated prices to meet its delivery obligations to its customers.

'The markets were so volatile, the prices went up so much that there was an incentive for people not to perform,' Mr Elman told BT on the sidelines of the Asian Financial Forum, adding that it would take years before default disputes were settled in court.

'Our risk management is as good as anybody's, it's better than many. I don't think the loss was caused by risk management; it was caused by the market.'

Still, as problems from the eurozone and the US weigh on the global economy, counterparty risk is starting to trend higher - in the same way it was heightened in the last financial crisis, said Mr Elman, who is acting CEO and chairman.

'There's always a risk that it'll come back again,' he said, when asked if the defaults were a one-off event. 'But this was particularly an experience that had not happened before, and everybody thought that cotton supplies were totally reliable.'

He added that counterparty risk is more worrying than credit risk for Noble, which rarely deals with problems tied to credit, such as with customers failing to pay for shipments that had been delivered.

Responding to criticism that Noble should have warned the market of the Q3 loss, Mr Elman said the company has 'a high moral standard'.

'We've been very careful not to lead the market in any way, plus or minus, right or left, north or south,' he said.

He declined to give projections for the company's Q4 or full-year results, but said it was still profitable.

'We made pretty much the same money in the nine months in 2011 - as well as we did in 2010, plus or minus $25 million. I don't think the first nine months of 2011 were a particular problem,' he said.

Mr Elman is set to announce a new CEO soon, though he declined to give any names. Earlier media reports put Yusuf Alireza, former Asia-Pacific co-president of Goldman Sachs, as the likely successor. This follows several top management changes at Noble since 2010.

Former CEO Ricardo Leiman quit last Nov 9, the day that Noble unveiled its surprise quarterly loss. Prior to this, executive chairman Tobias Brown, senior executive vice-president Peter James O'Donnell and chief financial officer Stephen Jeffrey Marzo had also left the company.

'I'm looking for a leader. A business of our size needs somebody who can embrace harmony and pull people together,' he said. 'Finding the right person is the challenge.'

Mr Elman expects funding to become more expensive, given the problems in the global economy, but pointed to Noble's 'enormous headroom' as an advantage it has. Noble had around US$1.8 billion in cash and over US$5.5 billion in committed credit lines and cash at the end of last September, he said.

Mr Elman said Noble is a 'builder of assets' rather than a buyer, but does not rule out acquisitions.

Plans are still on for a listing of Noble's agricultural business, but current market conditions have put a dampener on this, he said.

[egghead]

Written by The Edge
Tuesday, 07 February 2012 08:38

Commodities firm Noble Group named a former Goldman Sachs top Asian banker as its chief executive officer as it seeks to ease worries over a spate of senior level departures, reported Reuters.

Yusuf Alireza will take charge as the CEO with effect from April 16, while founder Richard Elman will step down as acting CEO, but remain chairman, Noble said in a statement on Monday.

Alireza was the former co-president of Asia, excluding Japan, for Goldman Sachs and a member of that Noble’s Global Management Committee.

Leiman's resignation marked the second time Noble had changed its CEO in two years and came after the departure of two senior executives, previous executive chairman Toby Brown and long-time chief financial officer Stephen J. Marzo.

Does having an investment banker as CEO mean more M&A?