Noble Group "sinking in a perfect storm", says Iceberg

Commodity trader Noble Group shares slumped after anonymous researcher Iceberg Research launched another negative report questioning company's finances.

Noble Group

Shares of Singapore-listed commodity trader Noble Group tumbled on Thursday after anonymous researcher Iceberg Research launched another negative report about the company.

"Noble is sinking in a perfect storm. The company is walking toward bankruptcy and liquidation ... Key traders are leaving," the researcher said in a report.

Shares in beleagured commodity trader fell as much as 7.6 percent to 36.5 Singapore cents. The stock price has plunged 96 percent since Iceberg's first report.

Iceberg Research, which doesn't identify its analysts, has been sparring with the Hong Kong-based company for more than two years.

The company rejected the claims, saying they're the work of a disgruntled ex-employee it had fired.

Singapore-listed Noble Group, which commenced its strategic review earlier this year, warned of a quarterly loss of as much as $1.8 billion last month.

"The loss is mostly due to the impairment of the commodity contracts (around $1.2billion). Our main argument against Noble was that this company fabricated profit by inflating the value of these contracts by billions," the report said.

The company has an outstanding debt of about $5 billion while its market capitalisation is now reduced to just over $300 million from $6 billion in February 2015.

"Noble needs billions from a new investor to repair its balance sheet and reverse its huge operating cash outflow. This potential investor has to be rich enough to inject this amount of money, and dumb enough to do it without proper due diligence," the report said.

Noble Group has also launched a sale of its remaining North American gas and power business and plans to reduce 56 percent of its workforce in a bid to reduce debt.

"The sale of the U.S. energy business won't solve the crisis," the report said. "Noble has been trying to find this miraculous investor for more than two years."

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.

"Nobody in the commodity industry thinks that Noble is affected by the 'environment', the 'downturn in commodity markets' or 'downturn in commodity trading'," the report said.