Noble Group Ltd., Asia’s largest commodities trader, is in advanced talks to sell the rest of its agriculture unit as it seeks to raise cash and avoid a credit rating cut to junk.
Noble is talking with potential purchasers about a 49% stake in Noble Agri, the business that trades food commodities from sugar to wheat, according to a statement from the Hong Kong-based company to the Singapore Stock Exchange.
Cofco Corp., China’s largest food company, is one of the potential buyers, according to a person familiar with the matter, who asked not to be identified because the talks are private. The company already owns a 51% stake in Noble Agri, which it purchased last year for $1.5 billion. Beijing-based Cofco officials didn’t immediately respond to e-mails or texts seeking comment.
Noble is seeking about US$750 million ($1.1 billion) for the stake and could get further compensation depending on how the agribusiness performs, the person said. The potential deal was reported earlier by Reuters. A Singapore-based spokeswoman for Noble declined to comment beyond the company’s statement.
Noble has said it plans to raise US$500 million through asset sales. Standard & Poor’s and Moody’s Investors Service said in October and November that they may reduce the company’s credit rating to junk if the liquidity position doesn’t improve.
The stock has fallen 65% this year after short-seller Muddy Waters LLC and a group called Iceberg Research published reports criticising the company’s accounting.
Noble denied the allegations and hired PricewaterhouseCoopers LLP to conduct a third-party review of its accounting. PWC published the report in August and said Noble complied with international accounting standards, while also recommending improvements in governance standards and the methodology used to value long-term contracts.
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Noble is talking with potential purchasers about a 49% stake in Noble Agri, the business that trades food commodities from sugar to wheat, according to a statement from the Hong Kong-based company to the Singapore Stock Exchange.
Cofco Corp., China’s largest food company, is one of the potential buyers, according to a person familiar with the matter, who asked not to be identified because the talks are private. The company already owns a 51% stake in Noble Agri, which it purchased last year for $1.5 billion. Beijing-based Cofco officials didn’t immediately respond to e-mails or texts seeking comment.
Noble is seeking about US$750 million ($1.1 billion) for the stake and could get further compensation depending on how the agribusiness performs, the person said. The potential deal was reported earlier by Reuters. A Singapore-based spokeswoman for Noble declined to comment beyond the company’s statement.
Noble has said it plans to raise US$500 million through asset sales. Standard & Poor’s and Moody’s Investors Service said in October and November that they may reduce the company’s credit rating to junk if the liquidity position doesn’t improve.
The stock has fallen 65% this year after short-seller Muddy Waters LLC and a group called Iceberg Research published reports criticising the company’s accounting.
Noble denied the allegations and hired PricewaterhouseCoopers LLP to conduct a third-party review of its accounting. PWC published the report in August and said Noble complied with international accounting standards, while also recommending improvements in governance standards and the methodology used to value long-term contracts.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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