Troubled Noble Group secures $1.05 bln sale of US unit; shares soar

Analysts expect the sale will ease investor concerns over the company's liquidity and balance sheet.

Noble Group warns of Q4 loss, $1.2 bln impairment on commodities slump
Noble Group founder and Chairman Richard Elman poses at his office in Hong Kong, China January 22, 2016.

Noble group's shares jumped on Monday after the commodities trader said it was selling its unit Noble Americas Energy Solutions (NAES) to Calpine Corp for US$1.05 billion.

As many as 204.5 million shares were traded in the frenzy that followed, sending the troubled stock soaring nearly 7 percent to S$0.205 cents.

The deal value for NAES was, however, lower than the indicative price of more than US$1.25 billion that the company announced in August 2015.

The sale of Noble Americas Energy Solutions takes the Hong Kong-based commodities trader a step closer to raising $2 billion in a bid to cut debt.

Analysts expect the sale will ease investor concerns over the company's liquidity and balance sheet.

"The sale of NAES substantially completes the $2 billion capital raising initiative that we announced in June", Nobles' Co-Chief Executive Officers Jeff Frase and Will Randall said.

"With this divestiture, Noble will continue to reduce debt while also funding growth opportunities in our high-return businesses," the statement added.

The turbulence at Noble followed a double whammy the company suffered -- the severe downturn in the commodities segment and a damaging accenting scandal.

The commodity trader was battered by a $1.2 billion writedown on weak coal prices last year. Noble Group said in February it had a $1.67 billion loss for 2015, its first annual loss in almost two decades.

The loss followed a steady decline in its share prices following the scandal. Noble, one the world's largest traders of commodities, was accused of inflating its assets by billions of dollars, a claim it rejected.

Noble shares had fallen 14 percent on May 17 after Fitch Ratings put it on watch for a potential downgrade.

CEO Yusuf Alireza, a former Goldman Sachs Asia co-head, left the company unexpectedly late that month.