Published August 27, 2009

Noble to extend loan facility, seek new credit line

US$1.8b short-term revolving loans for general corporate purposes

By OH BOON PING
Email this article
Print article
Feedback

COMMODITIES trader Noble Group said yesterday that it will borrow US$1.8 billion short-term revolving loans for general corporate purposes.

Mr Elman: Says the loans are primarily for expanding business and to fund the working capital requirements

In a statement, Noble said it has signed a mandate letter with nine financial institutions to arrange for an extension of an existing US$1.2 billion 'committed unsecured revolving loan facility' for up to two years and to seek commitments for a new US$600 million credit line for a year.

CEO Richard Elman told BT that 'the extension and new capital are primarily for business expansion and to fund our working capital requirements'.

Yesterday, the counter sank to a low of $2.18 in early session, before recovering to close at $2.22, up one cent. Some 16.1 million shares changed hands.

In May 2009, Noble successfully executed an extension and increase of its existing committed guarantee facility. The facility received strong interest from market participants and was upsized to US$800 million from the original size of US$700 million.

Noble has appointed The Bank of Tokyo-Mitsubishi UFJ, Commerzbank AG, DBS Bank, HSBC, ING Bank, JP Morgan Securities, RBS, Societe Generale and Standard Chartered as the mandated lead arrangers.

Noble's new credit facility is significant as syndicated loans in the Asia-Pacific region outside Japan slumped to US$119 billion this year from US$195 billion a year earlier as banks restart lending after Lehman Brothers' collapse, according to figures from Bloomberg.

The latest news also came after Noble doubled its second-quarter profit thanks to a one-time gain from the acquisition of Gloucester.

Net income rose to US$248.8 million, in the three months to June 30, from US$122.5 million a year earlier, despite sales falling 31 per cent to US$7.17 billion.

Excluding this gain, net profit for the second quarter was US$95 million, against US$90 million for the first quarter.

Noble had won control of Sydney-based Gloucester Coal in May after raising its cash bid to A$460 million (S$552 million) for shares it didn't already own in the coal miner.

First-half net profit margin rose to 1.4 per cent, after adjustments for one-time gains, from 1.2 per cent a year earlier.

The group also raised net proceeds of about US$125.5 million by placing out 84.7 million new shares at US$1.52 each, as its biggest shareholder Noble Temple Trading sold 36.3 million existing shares, concurrently with the exercise.