Noble Group

[CityFarmer]

As mentioned previously; as of 31st March 2016,  Noble's current assets consist of fair value derivatives which has maturity of beyond 4 years (1,339mil) and before 4 years (1,839 mil). We can safely concur Noble holds such derivatives until they mature. Interestingly, all of Noble's 6 bil of debts mature by 2020. It is worth noting then Noble had maturing debts of 2.5 bil in 2016 and 0.7 bil in 2017. Based on other components of the balance sheet, Noble is likely to experience a cash flow problem.

Fast forward to this week's announcement, Noble has declared that it has refinanced/paid all its debts due in 2016. In addition, from its recent presentation, debts due in 2017 has risen from 0.7 bil (as of 31 march) to 2.0 bil (as of 3 June). Noble intends to repay these 2 bil debts in 2017 through the sale of Noble America and proceeds of the 500 mil rights.

From these facts, it shows Noble has ensured its survival until 2017 by negotiating with banks to roll over debts for 1 more year. Given that Noble still has 2.8 bil more debts to clear by 2020 and that it has 1.8 bil of derivatives cash flow+1.3 bil in cash, it seems Noble may be able to survive if it is able to raise approx 1 to 1.5 bil for its impending sale.

<Interested in Noble if the price is right>

The stock, is becoming more interesting as a special situation bet.

First, I need a reasonably certainty on solvency. IMO, the vision still not reasonably clear yet. Bondholders' confidence seems a good gauge on Mr. Market's view on the topic.

Next, I need to do an reasonable estimation on earning, based on the new normal, after a poorer credit rating, and restructured asset/biz model

Last, I need to ensure a high MOS on pricing.

What is the right pricing? The theoretical ex-right pricing, is a good staring point, IMO

What is your view?

(not vested, probably not yet)