SINGAPORE/HONG KONG: Noble Group Ltd's shares plunged for a second straight day on Friday and have now lost half their value on an unexpected quarterly loss that has raised worries about the struggling commodity trader's ability to its finance its debt.
Noble reported a quarterly loss of $129.3 million for January-March, its latest setback in a crisis-wracked two years despite deep restructuring.
"Noble Group posted a loss in its core business and we question if the remaining business lines support the company's $3.3 billion of net debt now that the lucrative U.S. gas and power business has been sold and oil market volatility has died down," Andy DeVries, an analyst at CreditSights, said in a report.
Noble declined to comment on Friday. In its results call on Thursday, the company defended its ability to pay debt and manage liquidity.
"The group continues to be in discussions with its banks to ensure that the group's facilities provide the liquidity required to support the structure of the group's businesses going forward," said Noble CFO Paul Jackaman.
He said that for the remainder of 2017, Noble was still working on its key initiatives of improving profitability, reducing costs and maintaining a solid balance sheet.
The company said its net debt to capital stood at 46 percent as of March 31, in line with the group's stated target of 45 to 50 percent.
Noble has been seeking to repair investor confidence after setbacks that have included a questioning of its accounts by Iceberg Research and a commodities downturn that triggered a share price collapse, credit rating downgrades and a series of writedowns, asset sales and fund raising.
The shares fell 30 percent on Friday to a low of S$0.61, their lowest level since early 2002, valuing the company at about $576 million. Just last month, Noble undertook a 10-for-1 share consolidation to avoid penny stock status.
Noble's bond prices also took a hit. Noble bonds due 2022 fell 16 points on Friday to a price of 54/57 cents on the dollar. The prices have fallen about 40 points since the company warned of a quarterly loss on May 9. - Reuters
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