Noble Group warns of liquidity constraints as it reports second-quarter loss

By Anshuman Daga

SINGAPORE (Reuters) - Singapore-listed Noble Group Ltd, which is pursuing a $3.5 billion debt restructuring to stay afloat, warned of liquidity constraints as it reported a second-quarter net loss that was also caused in part by restructuring expenses.

Once Asia's largest commodity trader, Noble has shrunk its business after selling billions of dollars of assets, taking hefty writedowns and cutting hundreds of jobs. Its restructuring plan gained ground last month when it won over a key shareholder with a sweetened equity offer.

The company, which has already won support from 86 percent of its senior creditors, said on Tuesday that about 30 percent of its shareholders had committed to back its proposed restructuring, which is set for a vote on Aug. 27.

Noble said it was focussing on completing the final phase of the restructuring to provide the group with a sustainable capital structure.

Under the debt-for-equity proposal, Noble is seeking to halve its debt and hand over a 70 percent equity stake in its restructured business to senior creditors, while existing shareholders will get a 20 percent stake and the remaining 10 percent will be held by its management.

The company, which had forecast a quarterly loss of $115 million to $140 million, said performance continued to be impacted by "ongoing constraints on liquidity and availability of competitive trade finance to support operations."

It posted a net loss of $128.3 million in the April to June quarter, wider than a loss of $72 million reported in the first quarter. During the second quarter of 2017, it booked a loss of $1.75 billion, hit by writedowns.

The last time Noble made a profit was in the quarter ending in December 2016. In the latest quarter, revenue from continuing operations fell 29 percent from a year earlier to $1.12 billion.

Noble, founded more than 30 years ago by Richard Elman, who rode a commodities bull run to build one of the world's biggest traders, was plunged into crisis in February 2015 when Iceberg Research questioned its books. Noble has stood by its accounting.

Noble's market value has plunged to just $118 million from $6 billion in February 2015, as the company reported record losses, sold many businesses, and lost its investment grade credit rating.

(Reporting by Anshuman Daga; Editing by Christian Schmollinger)