Business

Noble shares almost halve in value after loss warning

A worker in the coal industry handles coal at a coal prep plant on May 19, 2017 outside the city of Welch, West Virginia Image copyright Getty Images
Image caption Noble is "positioning itself for continuing stress" in the commodity sector.

Noble Group, formerly Asia's biggest commodities trader, saw its shares almost half in value after warning of a $1.8bn (£1.4bn) quarterly loss.

The heavily indebted firm also announced plans to sell most of its assets outside of Asia to raise cash.

Noble has been battling to stay afloat for more than two years after being hit by a collapse in commodity prices and allegations of improper accounting.

The Singapore-listed company has lost 75% of its market value this year.

'Continuing stress'

Noble, which was founded three decades ago by British trader Richard Elman, has changed management and cut costs in an attempt to survive.

However it is still struggling to make money and meet its debt obligations because of the weak prices of oil and coal.

The trading house has to repay nearly $2bn in bonds and bank loans by 2018.

As a result, Noble is selling its US energy and power business to rival Mercuria Energy Group at a significantly discounted price, and is also seeking a buyer for its global oil unit.

"The commodities trading industry will continue to face both challenging conditions and realignment as established participants face a low margin trading environment," Noble said in a statement.

"The group, therefore, is positioning itself for continuing stress in the sector, which the board believes is likely to lead to industry consolidation".

More on this story