UPDATE 2-Indebted Noble confirms bank loan relief, but skips coupon payment
* Defers coupon payment on perpetual securities
* Says continues to be in talks with potential investors
* Says in talks with bankers over credit facility due May
* Shares down about 5 percent, perpetual bonds slide
(Adds shares and bonds movement, context, analyst comment)
By Aradhana AravindanSINGAPORE, June 20 (Reuters) - Noble Group Ltd <NOBG.SI> on
Tuesday confirmed it had extended a key debt deadline and was in
"constructive" talks with potential investors, but the
crisis-hit trader also pushed back payment of the coupon on a
closely watched bond.
The decision to defer payment of the coupon on its $400
million perpetual securities, due June 26, worried investors,
who said the failure to pay $12 million sent a negative signal
and suggested lenders may have asked the group to defer payment
where possible. Shares slipped after a sharp rise on Monday.
"While non payment of the perpetual bond coupon will not
trigger a default event, it is a further hit to the company's
reputation. This is hurting investor confidence," said one Hong
Kong-based analyst, who declined to be named.
Noble - which has sold billions of dollars in assets over
the past two years - from its U.S. energy unit to its
agribusiness, also said it could sell more and cut costs further
to boost liquidity.
The remaining assets and investments on its books are
smaller - from vessels used by its logistics business to stakes
in Australian and Indonesian coal miners.
At its height, Hong Kong-based Noble was Asia's largest
commodity trader, a powerhouse in coal and oil to rival larger
European players like Glencore <GLEN.L>.
Questions over its accounting and the sharp downturn in
commodity markets since 2012, however, have left the company
struggling to meet its debt obligations, forcing it to
dramatically reduce the scale of its operations.
It has been buffeted by a collapsing share price, credit
downgrades, management upheavals and a series of writedowns and
asset sales. Its shares were trading on Monday at S$0.465 - down
from a 2011 peak of around S$17.
In a statement on Tuesday, Noble said its revolving credit
facility would be extended by 120 days from June 20, confirming
reports last week. A person familiar with the matter told
Reuters on Friday that Noble had extended the $2 billion credit
line, but was told to find a strategic investor. [nL3N1JD3EI]
Noble said it was also continuing talks with its bankers in
relation to a revolving credit facility due May 2018. Its
bankers, based in Europe, the United States and Asia, have hired
legal and financial advisers, Noble said.
Noble has a bond worth about $379 million due in March and a
$1.1 billion loan due in May 2018.
Traders, analysts and industry sources have warned that the
credit extension was likely to be only a temporary fix, and some
said on Tuesday that they did not expect an imminent investment
or major sale. [nL3N1JG146]
"I don't factor in any strategic sale yet," said Lorraine
Tan, director of equity research in Asia at Morningstar.
"But obviously, if they do find a strategic partner that
would be very positive because it actually strengthens their
ability to get funding, which is what a trading house needs."
Noble's $400 million perpetual bonds <XS107907602=TE> slid
four points on Tuesday. Noble can defer payments without
triggering a default under the bonds' terms. [nL3N1JH06H]
Coupon payments on its other bonds are due in July and
(Reporting by Aradhana Aravindan in SINGAPORE; Additional
reporting by Umesh Desai in HONG KONG; Editing by Stephen Coates
and Himani Sarkar)
((email@example.com; +65 6403 5659; Reuters
Keywords: NOBLE CREDIT/ (UPDATE 2)