Crisis-hit commodity trader Noble Group has extended a major debt deadline, but analysts warn it may not be enough to restore confidence around the long term viability of the once-soaring firm.
At its peak in 2010, Noble was Asia's largest commodity trader with a market cap of more than $10 billion. Shares hit an all-time high of 17 Singapore dollars in 2011, but have since fallen to about 50 Singapore cents, as it struggles with the aggressive commodity price decline in recent years.
Noble has been forced to shuffle management, sell down assets and slash costs to boost liquidity. At the same time, its management has been navigating a series of credit downgrades, write-downs and accusations of improper accounting standards — all of which contributed to the dramatic collapse in its share price.
"We believe that the company is in dire need of a transformational transaction such as a strategic partner or sale of a significant portion of its assets to arrest the negative feedback loop," said Todd Schubert, head of fixed income research at Bank of Singapore.
On Tuesday, Noble Group said it had reached an agreement with lenders to extend its revolving credit facility by 120 days from 20 June, 2017.
"The Group continues to be in talks with potential investors concerning the sale of an interest in the Group or its subsidiaries or parts of its business," Noble Group said in a Tuesday statement.