Noble Group

Embattled commodities trader Noble Group on Friday said it would sell its U.S.-based ethanol producing business to Mercuria Investments, instead of Zeeland Farm Services for a gross consideration of US$20 million.

Noble entered into a new equity purchase agreement with Mercuria on Thursday, on the same terms as its deal with Zeeland, except the deletion of the provision relating to the go-shop period, and an increase base consideration.

Last month, Noble had agreed to sell its ethanol business Noble Americas South Bend Ethanol LLC (NASBE) to Zeeland for US$12.5 million plus adjustments.

NASBE is currently fully held by Noble Americas Corp (NAC), which Noble is selling to Vitol U.S. Holdings.

Noble said it would terminate its agreement with Zeeland on December 11 and a termination fee of US$2 million will be incurred.

Net proceeds arising from the Nasbe disposal is expected to be about US$18 million, after deducting the termination fee.

The Hong Kong-based firm, which is in talks with investors to address its deteriorating financial position, has been forced to shrink its business, exiting loss-making and non-core operations in order to survive.

Last month, the company announced the surprise departure of its co-Chief Executive Jeff Frase, just days after it reported a third-quarter loss of $1.17 billion and warned that the operating environment remains challenging.

Noble Group shares were down 1.6 percent at S$0.13 on the Singapore Exchange.