Noble shares jump after Abu Dhabi fund discloses 5% stake

SINGAPORE: Shares in embattled commodity trader Noble Group surged on Friday after an Abu Dhabi Financial Group equity fund disclosed that it had purchased a 5% stake.

The investment follows news this week that Noble had gained an extension on a key debt deadline and was in ”constructive” talks with potential investors, although it also pushed back payment of a coupon on a closely watched bond.

The equity fund, Goldilocks Investment Co, said in a filing it had bought the stake in purchases on Monday and Tuesday for almost S$31 million (US$22.3 million).

Noble’s stock jumped 16.5% on Friday to S$0.53, taking this week’s gains to 63%. Even so, the stock is still down some 70% this year.

Questions over its accounting and a sharp downturn in commodity markets since 2012 have left Noble struggling to meet its debt obligations, forcing it to dramatically reduce the scale of its operations.

The company, which has stood by its accounts, has also been buffeted by credit downgrades, management upheavals and a series of writedowns and asset sales.

Jingyi Pan, a market strategist at IG Asia, said that while Goldilocks’ stake purchase would provide some confidence in Noble in the short term, the impact would be limited.

“I see that investors could be invested in the near term because of the extension, but in the longer term, you have to depend on how (Noble’s) restructuring and profitability would be,” she said.

The US$200 million Goldilocks fund was launched last October with the aim of taking minority stakes in companies and helping them to restructure and develop.

Abu Dhabi Financial Group, which has more than US$5 billion in assets under management, was not immediately available for comment. Noble declined to comment.

Noble also said this week that it had sold its 45% stake in an Indonesian joint venture, which provides coal logistics services, for US$1.00. - Reuters