BUY S$1.21 STI : 2,531.02
Price Target : 12-Month S$ 1.70
Noble announced this evening that an application has been filed to possibly spin-off and list its agriculture business on the Singapore Stock Exchange (SGX).
The company notes that no final decision has been made on the possible listing and the transaction is subject to market conditions. Based on our FY12 earnings forecast, Noble's agriculture business represents c.23% of the group’s gross profit.
Announcement of possible spin-off of the agriculture segment is ahead of expectations as we had thought Noble would wait for their oil plantations to start producing first.
We see this announcement as a positive development with the following potential impacts on Noble:
1. Proceeds will alleviate funding needs for expansion of its agricultural business - subject to valuation
2. Possible debt retirement at the holding company level resulting in interest savings
Pending further details, we are maintaining our Buy rating and TP of S$1.70.
No comments:
Post a Comment