Singapore-listed commodity trader Noble Group expects to refinance its debt ahead of schedule, after reporting its first annual loss in nearly 20 years on Thursday, battered by a US$1.2 billion ($1.7 billion) writedown for weak coal prices.
Noble, one of the biggest traders of commodities from coal to iron ore to oil, is battling to boost investor confidence after Standard & Poor's and Moody's cut its investment grade ratings to junk in December, following a bruising accounting dispute and weak markets.
“We have self-evidently advanced our key strategic objectives over the last three years despite a very difficult external environment,” CEO Yusuf Alireza, who has fought back by
selling assets, cutting business units and trimming debt, said in a statement.
Noble's junk rating has stoked concerns about its refinancing ability but Alireza, a former Goldman Sachs banker said it expects to close its refinancing ahead of a May due date.
“We have US$2.2 billion of a revolver. Clearly we have approved the term sheet to a number of our core banks and we will be moving towards the refinancing of the revolver," said Alireza, who was asked about the spreads and size of the refinancing by analysts in a call, but declined to give details.
The company highlighted the imminent receipt of US$750 million from the sale of its agri business.
On Thursday, Noble reported an annual loss of US$1.67 billion after the non-cash impairment charge, versus a profit of US$132 million a year ago on a 22% fall in revenue. It proposed no dividend for last year.
The company had warned of the full-year loss two days ago.
After Noble's loss warning, Moody's cut its corporate rating and senior unsecured bond ratings to Ba3 from Ba1, while S&P said the loss could complicate its refinancing.
“The downgrade shouldn't come as a surprise to anyone, but it is a major issue for the refinancing," Robert Southey, managing partner at London-based boutique firm Trench Capital Partners, said ahead of Noble's results.
“The core banks are in a ‘Catch 22’, they can't all sell out at their desired price, whilst applying usual lending criteria is fraught with the risk that markets worsen and they are left holding the bag," Southey said.
Already hit by the collapse in commodity markets, Noble's shares have plunged by two-thirds in the past 12 months, and its bonds have sold off after Iceberg Research alleged it was
inflating its assets by billions of dollars.
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Noble, one of the biggest traders of commodities from coal to iron ore to oil, is battling to boost investor confidence after Standard & Poor's and Moody's cut its investment grade ratings to junk in December, following a bruising accounting dispute and weak markets.
“We have self-evidently advanced our key strategic objectives over the last three years despite a very difficult external environment,” CEO Yusuf Alireza, who has fought back by
selling assets, cutting business units and trimming debt, said in a statement.
Noble's junk rating has stoked concerns about its refinancing ability but Alireza, a former Goldman Sachs banker said it expects to close its refinancing ahead of a May due date.
“We have US$2.2 billion of a revolver. Clearly we have approved the term sheet to a number of our core banks and we will be moving towards the refinancing of the revolver," said Alireza, who was asked about the spreads and size of the refinancing by analysts in a call, but declined to give details.
The company highlighted the imminent receipt of US$750 million from the sale of its agri business.
On Thursday, Noble reported an annual loss of US$1.67 billion after the non-cash impairment charge, versus a profit of US$132 million a year ago on a 22% fall in revenue. It proposed no dividend for last year.
The company had warned of the full-year loss two days ago.
After Noble's loss warning, Moody's cut its corporate rating and senior unsecured bond ratings to Ba3 from Ba1, while S&P said the loss could complicate its refinancing.
“The downgrade shouldn't come as a surprise to anyone, but it is a major issue for the refinancing," Robert Southey, managing partner at London-based boutique firm Trench Capital Partners, said ahead of Noble's results.
“The core banks are in a ‘Catch 22’, they can't all sell out at their desired price, whilst applying usual lending criteria is fraught with the risk that markets worsen and they are left holding the bag," Southey said.
Already hit by the collapse in commodity markets, Noble's shares have plunged by two-thirds in the past 12 months, and its bonds have sold off after Iceberg Research alleged it was
inflating its assets by billions of dollars.
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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