Business

Noble Group shares plunge once more

Shares in troubled commodities trader Noble Group plunged again yesterday after taking a massive hit last week, sparking concerns over the company's viability.

Noble sank 14 per cent to a 15-year low of 57 cents, before ending the day at 59 cents.

It plunged 48 per cent last week, along with a sharp decline in the company's bonds.

"Many people have asked whether the fall is going to last or is it still a viable entity going forward," Mr Nicholas Teo, a trading strategist at KGI Securities in Singapore, told Bloomberg News.

He said the creditors need to assess whether the company is "still an entity that one should be dealing with as a counterparty either for trading, for borrowing or for just doing business with".

SETBACKS

In the latest in a series of setbacks, Hongkong-based Noble reported a loss of almost US$130 million (S$181 million) in the first quarter and said it would not return to profitability until next year or 2019, at least.

Its stock was hammered in 2015 by a fall in commodities prices, and it also suffered a credit rating downgrade and faced allegations of irregular accounting practices.

Noble has been selling assets and cutting costs to boost its finances, and S&P Global Ratings said last week that the company's debt burden is unsustainable given its current earnings trajectory.

Chief financial officer Paul Jackaman said last week that discussions with the investor are still ongoing.

Noble is in talks with lenders over renewing a secured borrowing facility that has been extended to the end of next month, he added. - AFP

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