Singapore-listed Noble Group said on Tuesday (Dec 23) it has reached an agreement to sell its remaining 49 per cent stake in Noble Agri to China's Cofco Corp for US$750 million.
Commodities trader Noble Group said on Tuesday (Dec 23) it has reached an agreement to sell its remaining 49 per cent stake in Noble Agri to Chinese grain trader Cofco Corp for US$750 million.
In addition, the Singapore-listed Hong Kong-based company said it may receive as much as US$200 million in additional amounts depending on the future growth of the agricultural unit.
“After completion of this transaction, Noble Group’s financial metrics will be well in excess of those required of an investment grade credit,” the company said in a press statement, adding that the transaction will ensure that the commodities trading firm has “comfortably exceeded its commitment” made six weeks ago to raise US$500 million through asset sales.
Credit-rating firms Moody’s Investors Service and Standard & Poor’s have said in recent months that they would likely downgrade the company’s investment grade rating to "junk" status if its financial situation did not improve.
All proceeds from this transaction will be used to pay down debt, Noble Group said.
China's largest food company Cofco already owns the other 51 per cent in Noble Agri, which it bought for about US$1.5 billion in 2014.
Shares of Noble Group have fallen 65 per cent this year amid tumbling commodity prices and allegations of accounting irregularities first raised by anonymous research firm Iceberg Research in February. Noble has since denied any wrongdoing.
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