Noble Group to exit remaining N. America business, cut half its workforce

Noble Group will sell its North American Gas & Power business to Mercuria Energy America for $248 million.


Embattled commodity trader Noble Group on Wednesday said it would sell its remaining North American gas and power business and reduce 56 percent of its workforce in a bid to reduce debt.

The news comes as the indebted trader expects adjusted net loss for the second quarter of $450 million to $500 million, adjusted for exceptional items.

Noble Group will sell its North American Gas & Power business to Mercuria Energy America for $248 million as it positions itself for challenges facing the commodities trading industry, it said in a statement released after market hours.

Noble has commenced a formal sales process of its Global Oil Liquids business, with a short list of potential buyers and final bids are expected during the third quarter, it said.

The disposal will "generate significant cash proceeds" and allow the group to retire the
$2 billion Noble Americas Corp revolving credit facility and the $1 billion Noble Clean Fuels revolving credit facility.

The company sold its North American energy distribution unit to U.S. firm Calpine Corp last year.

Noble, whose top shareholders include Elman and sovereign wealth fund China Investment Corp, is now mainly focused on coal, carbon steel, metals and LNG businesses.

In a bid to further reduce costs, the group will bring its headcount to about 400 from current 900.

Singapore-listed Noble Group commenced its strategic review earlier this year and has an outstanding debt of about $5 billion.

The Hong Kong-based company also formulated an asset disposal programme, which will generate net proceeds between $800 million and $1 billion over the next two years.

Noble Group said it continues to remain in talks with lenders to waive the financial covenants until October 20.

Noble Group shares closed down 2.5 percent at 57 Singapore cents on Wednesday. The stock is down 66 percent so far this year and has a market capitalisation of just over $300 million from $6 billion in February 2015.