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23.10.2017 13:53Noble Group to sell oil liquids unit to Vitol for $1.4 billion
© Noble Group
Struggling commodities trader Noble Group agreed to sell its Americas-focused oil trading business to Vitol for about $580 million as part of a debt-cutting strategy, and warned of a big loss for its third quarter, Reuters reported.
Noble is shrinking to an Asian-centric company focused on its core coal trading, LNG and freight businesses. It is slashing jobs and selling assets to reduce debt and win support from lenders after a crisis-wracked two years.
The company was plunged into crisis in February 2015 when Iceberg Research questioned its accounts, and then the company was hit by a commodities downturn. Noble’s market value has plummeted to less than $400 million from $6 billion in February 2015.
Noble said gross proceeds from the sale of its oil liquids business would be $1.4 billion, and after deducting debt of about $836 million, cash proceeds would be about $580 million.
In July, Noble announced an up-to-$1 billion disposal plan for assets outside North America over the next two years to tackle Noble’s more than $3 billion of debt.
Noble warned of a total net loss of $1.1 billion to $1.25 billion in the three months ending September. This follows a $1.75 billion net loss reported in April-June.
In August, ratings agencies S&P and Moody’s cut their credit ratings on Noble, citing high default risks.
Noble is a big player in the global physical oil market, trading crude and refined products. The company has blending and wholesale capabilities in North America and the Caribbean, alongside long-term storage leases globally.
A purchase of Noble’s oil liquids business will reinforce Vitol’s position as a leading oil trader.
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