Business

Noble shares sink to lowest since 2000

Noble Group's woes are far from letting up as shares of the commodity trader sank to their lowest level since 2000 yesterday.

The counter slumped as much as 11 per cent in morning trade before closing at 31.5 cents - 1.6 per cent or half a cent lower than Monday's close and down 82 per cent to date this year.

The sell-off was triggered by investor fears that it may not be able to engineer a turnaround even as it presses on in talks with core banks to try and secure more funding.

The price drop has left Noble's market capitalisation at $413.5 million, compared with $1.54 billion a year ago.

A Bloomberg report on Monday, citing an unnamed source, said Noble is asking lenders to extend till the end of the year a US$2 billion (S$2.8 billion) credit facility that expires this month.

The firm has about US$2.1 billion of debt obligations due by the end of next year, according to Bloomberg data.

An extension would give Noble more time to find new investors, sell assets or close unprofitable businesses.

KGI Securities Singapore trading strategist Nicholas Teo said in the Bloomberg report that Noble's share price could slumplower than 10 cents if it is unable to extend the credit facility, saying "It's all up to their ability to refinance this month."

But DBS Bank analyst Mervin Song believes Noble should be able to refinance its credit facilities, albeit smaller in size and with higher borrowing costs, as long as China Investment Corp remains a shareholder. - THE STRAITS TIMES

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