Noble shares rise 37% on talk of rescue plan

This article is more than 12 months old

Noble stock shot up yesterday on a report that the embattled commodities trader's hopes to sell an interest in the group as part of a rescue plan may not be a long shot after all.

A Bloomberg news report that Chinese conglomerate Cedar Holdings has expressed interest in buying control of Noble drove the shares to a high of 28 cents by midday - up 7.5 cents or 37 per cent.

The rush tapered off a tad with the counter finishing the day at 27 cents, a gain of 6.5 cents or nearly 32 per cent.

About 35 million shares changed hands, making it the day's sixth most active counter. Noble is up 35 per cent this year.

The renewed interest yesterday prompted a trading activity query from the Singapore Exchange.

Noble echoed its previous remarks in response: that it was in talks, "which continue", with various potential strategic parties and creditors. These talks are "open and constructive" and "moving forward" but there is no assurance on their possible outcome, it added.

Cedar, which is based in Guangzhou, is reported to have made an informal approach to some major Noble investors.

Cedar recorded sales of 157 billion yuan (S$32.3 billion) in 2016, according to its website. Its operations include supply chain, chemicals, tourism, real estate and finance.

Noble has been locked in talks with creditors to resolve its US$3.5 billion (S$4.6 billion) debt headache. The firm has said the discussions are to manage the maturity of its borrowings to optimise the use of available cash.

Analysts generally believe that a strategic investor may be hard to pin down until Noble gets its house in order.

It is believed the talks with creditors revolve mostly around swopping debt for equity as well as terming out the rest for a "long period" by issuing new debt for old and borrowing against assets.