Noble guides for second-quarter net loss of amid restructuring costs

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Troubled commodity trader Noble issued guidance on Thursday that it expected to report a second-quarter net loss of US$115 million to US$140 million, primarily on restructuring expenses and net finance costs.

Noble estimated it would report around US$95 million in restructuring expenses and net finance costs and tax of US$70 million to US$80 million in the quarter, it said in a filing to SGX after the market close on Thursday.

“The majority of the restructuring expenses incurred in second quarter 2018 related to fees associated with the group’s interim trade finance facilities, a work fee payable to the Ad Hoc Group and a waiver fee payable to holders of the group’s senior unsecured revolving credit facility,” it said. “Such expenses also include legal and financial advisory fees.”

Noble said it expected to report operating income from supply chains for the quarter of US$65 million to US$80 million and a profit
before interest, tax and restructuring expenses from continuing operations, after selling, administrative and operating (SAO) expenses, in the range of US$35 million to US$50 million.

For the first half, it expected a loss of US$185 million to US$210 million, it said.

“Global commodity prices have been strong over the first six months of 2018, supported by both growth in demand and factors affecting supply such as production cuts and economic sanctions,” the statement said. “However, while operating income from supply chains improved in the quarter, the group’s performance in second quarter 2018 continued to be impacted by the ongoing constraints on liquidity and availability of competitive trade finance to support its operations, along with the impact of restructuring expenses associated with implementing the proposed restructuring.”

It noted the expected second quarter net loss would result in a negative net asset position of around US$1.0 billion as of 30 June.

“However, the Board believes that the proposed restructuring, once implemented, should restore shareholders’ equity and create a sustainable capital structure which will allow the group to reposition its business and expand on its position as a leading industrial and energy products supply chain manager in the Asia Pacific region,” it said.

In a separate SGX filing after the market close on Thursday, Noble said that the High Court of Singapore dismissed a case filed by the company’s former CEO Ricardo Leiman and his family trust, Rothschild Trust Guernsey Ltd. The filing said the plaintiffs were seeking bonus, restricted shares and options which were withheld after Leiman’s employment was terminated as well as other related costs and expenses, totaling around US$48 million.

The court also ordered the plaintiffs to pay two-thirds on Noble’s costs in the proceedings, the filing said.

Shenton Wire contacted Leiman for comment outside of office hours via a LinkedIn message, which wasn’t immediately returned.

In another SGX filing after the market close on Thursday, Noble said that it wouldn’t pay the coupon due 30 July on its 6.75 percent U.S. dollar fixed rate senior notes due 2020 in principal amount of US$1,176,920,000.

Noble said that was due to its binding restructuring support agreement dated 14 March between the company and consenting creditors.


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