Business News

Noble Group nets less than expected from oil unit sale to Vitol

• Bookmarks: 7


FILE PHOTO: The reception of Noble Group is seen at its headquarters in Hong Kong March 23, 2015. REUTERS/Bobby Yip/File Photo

LONDON (Reuters) – Struggling commodities trader Noble Group has completed the sale of its U.S.-focused oil business to the world’s largest oil trader Vitol, but net proceeds from the deal are lower than a previously announced estimate, the company said on Monday.

In a statement, Noble Group said net proceeds from the sale of Noble Americas Corp (NAC) to Vitol were estimated at about $400 million.

In October, Hong-Kong based Noble said gross proceeds from the deal would be about $1.42 billion and it expected to make about $580 million after repaying loans.

Noble said the lower return on the sale was “primarily due to operating losses of NAC from 1 October 2017 to the closing date.”

The Singapore-listed company, which had a market capitalization of $6 billion in early February 2015, was plunged into crisis after a report by blogger Iceberg Research later that month questioning its accounting.

Noble stood by its accounts and rejected the report’s allegations but coupled with a major commodities downturn, the firm was unable to recover investor confidence.

Its market value has shrunk to around $200 million as it has progressively sold off large parts of its business to stay afloat.

Noble also sold U.S. gas and power business to Mercuria for less than previously announced – $168 million compared with $250 million.

Paul Brough, a restructuring specialist who oversaw part of the liquidation of Lehman Brothers, was appointed chairman last year and said he was taking steps to avoid insolvency.

The company has also been closing what remains of its global oil trading business, returning to its roots as an Asian hard commodities trader.

7 recommended
comments icon0 comments
0 notes
56 views
bookmark icon

Write a comment...

Your email address will not be published. Required fields are marked *