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UPDATE 2-Noble shares jump after Abu Dhabi fund discloses 5 pct stake
June 23, 2017 / 5:37 AM / 6 months ago

UPDATE 2-Noble shares jump after Abu Dhabi fund discloses 5 pct stake

* Goldilocks bought Noble stake on Monday, Tuesday

* Noble confirmed extending key debt deadline this week

* Noble shares still down nearly 70 percent this year

* Fitch cuts rating on Noble to CCC (Adds Fitch ratings downgrade)

By Aradhana Aravindan

SINGAPORE, June 23 (Reuters) - Shares in embattled commodity trader Noble Group surged on Friday after an Abu Dhabi Financial Group equity fund disclosed that it had purchased a 5 percent stake.

The investment follows news this week that Noble had gained an extension on a key debt deadline and was in “constructive” talks with potential investors, although it also pushed back payment of a coupon on a closely watched bond.

The equity fund, Goldilocks Investment Co, said in a filing it had bought the stake in purchases on Monday and Tuesday for almost S$31 million ($22.3 million).

Noble’s stock jumped 16.5 percent on Friday to S$0.53, taking this week’s gains to 63 percent. Even so, the stock is still down some 70 percent this year.

Abu Dhabi Financial Group, which has more than $5 billion in assets under management, was not immediately available for comment. Noble declined to comment.

Questions over its accounting and a sharp downturn in commodity markets since 2012 have left Noble struggling to meet its debt obligations, forcing it to dramatically reduce the scale of its operations.

The company, which has stood by its accounts, has also been buffeted by credit downgrades, management upheavals and a series of writedowns and asset sales.

Separately, Fitch Ratings said it downgraded Noble’s credit rating to CCC from B-. Standard and Poor’s as well as Moody’s have also been further cutting their ratings on Noble in recent months.

“The downgrade follows continued uncertainty regarding Noble’s funding capacity and how this will affect its operation at its current business scale,” Fitch said after trading hours on Friday. It said the extension of the loan deadline did not provide evidence of medium-term funding stabilisation.

Jingyi Pan, a market strategist at IG Asia, said that while Goldilocks’ stake purchase would provide some confidence in Noble in the short term, the impact would be limited.

“I see that investors could be invested in the near term because of the extension, but in the longer term, you have to depend on how (Noble‘s) restructuring and profitability would be,” she said.

The $200 million Goldilocks fund was launched last October with the aim of taking minority stakes in companies and helping them to restructure and develop.

Noble also said this week that it had sold its 45 percent stake in an Indonesian joint venture, which provides coal logistics services, for $1.00.

$1 = 1.3893 Singapore dollars Reporting by Aradhana Aravindan; Editing by Edwina Gibbs and Christopher Cushing

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