Business

Noble Group shares plummet 31%

Beleaguered Noble Group plunged 31 per cent at the opening bell yesterday after a third credit rating agency downgraded the commodities trader and warned of default risks within a year.

The downgrade by Standard & Poor's (S&P) and a report that an investor may have walked away sent Noble shares crashing to 40.5 cents, prompting a query from the Singapore Exchange.

The counter was at 42 cents before a halt kicked in after 36 minutes of trade, pending the release of an announcement.

Noble has nosedived 76 per cent so far this year, after a 44 per cent drop last year.

Its market capitalisation has shrunk to a $551.4 million from $9.6 billion in early 2015 before Iceberg Research questioned its accounting practices as it battled a commodities downturn.

A Reuters report also claimed that Chinese state-owned company Sinochem was no longer pursuing an investment in the trader.

Sinochem turned cautious on Noble after unexpected first-quarter losses and warnings by outgoing chairman Richard Elman it would not be profitable for the next two years, the report said.

Earlier this month, Noble reported a surprise loss of US$129 million (S$179 million) for the first quarter, compared with US$40 million profit a year earlier.

It blamed its loss on challenging market conditions and dislocations in the coal market.

There is "potential the company will face distress and a non-payment of its debt obligations over the next 12 months", S&P said on Monday as it cut the company's ratings to CCC+ from B+.

- THE STRAITS TIMES

stock marketFinanceEconomy