Noble Group Limited - To bring Q2 results fwd; strategic investor

Bringing forward Q2 results date; PWC report; more disclosures
In a pre-market SGX announcement this morning, Noble said that it will bring its Q2 results release date forward to 10 August from the originally scheduled 13 August (note also 10 Aug is a public holiday in SG). The findings of the PWC independent assurance report will also be released on the same day as results. The company will also provide additional disclosures around Yancoal valuation and on its inventory sales as part of its results release. There will also be an Investor Day in Singapore (date TBD) and there will be no restrictions on third party attendance nor on questions within the time available.

Credit and liquidity
The company confirmed that it has ample funds to meet its upcoming 4 Aug bond redemption (total USD735mm). The company said that it will still have readily available cash of well over USD1bn after the bond redemptions. At the end of July it also has around USD15bn in bank lines. Liquidity position remains strong.

Strategic investor
Management has been approached by a number of parties in terms of potential financings, and strategic and/or investment options. No deal is guaranteed and has been announced but management/Board is committed to maximize the value of Noble for its shareholders and stakeholders. Noble will keep the market informed as appropriate.

Q2 performance and Q3 to date
Noble noted that Q2 performance is satisfactory and confirmed that its first month of Q3 is ahead of Q2.


Technical Analysis
Daily Chart
Bond view
NOBLSP bonds have suffered in past week along with the sharp decline in share price. We also note that NOBLSP’18 and NOBLSP’20 spread curves are now inverted. We welcome the company’s announcement today and see the affirmation on its liquidity position as a positive for the credit. Bringing forward its results date also means Noble can start defending its share price via on market buybacks sooner. The resources used for the buybacks have so far been manageable for Noble’s liquidity position. Given the rapid decline in Noble’s market capitalization we believe a strategic investor may be needed to restore investors’ confidence in the name. We will continue to monitor announcement on this front, its Q2 results (for OCF performance), findings of the PWC report, and any potential negative rating action by Moody’s. We maintain our Buy call on NOBLSP’20 ($96, Z+600bp, 7.7% YTM). (Read Report)

Source : Deustche Bank Markets Research

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