Noble Group, the beleaguered commodities trader, announced the resignation of its chief executive Yusuf Alireza, and said it plans to sell Noble Americas Energy Solutions, one of its crown jewels.
Mr Alireza has presided over a torrid time for the Singapore-listed commodities trader, with slumping prices, a large debt pile and questions over its accounting practices knocking almost 90 per cent off Noble’s share price from its 2011 peak.
Mr Alireza is to be replaced by a duo of joint chief executives — William Randall and Jeff Frase — both of whom have been with the group for several years, the company said in a statement to the Singapore Exchange.
The planned sale of Noble Americas Energy Solutions (Naes), which sells gas and power to customers and was formerly part of RBS Sempra, would see Noble dispose of a unit that is consistently profitable and able to generate cash.
Noble, which was founded by British-born former scrap dealer Richard Elman 30 years ago, said the Naes transaction was “expected to generate both significant cash proceeds and profits to substantially enhance the balance sheet”.
Noble, which has a market capitalisation of S$2bn ($1.4bn), booked a $1.2bn writedown on long-term coal contracts in its 2015 annual results as assessments of future energy prices fell. That led to a $1.7bn net loss, its first annual swing into the red in more than two decades.
The trading house’s first quarter results of 2016 were down on the same period last year as Noble tried to conserve cash and counterparties tightened credit lines to the company.
This month, the Hong Kong-based company secured a $1bn credit facility as part of $3bn it was trying to raise in order to refinance debts due in May. However, this was said to be $500m less than the amount it was seeking. The interest rate it is paying is also much higher than the previous year, and above that charged to some rivals.
Noble in December sold the remaining 49 per cent stake in its agricultural unit to Cofco, the Chinese state-backed grain trader for $750m.
Despite these efforts, Fitch in May joined its rival credit rating companies in downgrading Noble to “junk” status — Moody’s downgraded Noble’s rating in December, while Standard & Poor’s followed suit in January.
Noble said in a statement to the Singapore exchange on Monday that Mr Alireza had been instrumental in securing the recently announced refinancing, and that completion of this phase meant he felt “the time was right for him to move on”.
The two new co-chiefs of the company are senior figureheads within the business. Mr Randall is president of Noble and also an executive director. Mr Frase is a former head oil trader at Goldman Sachs and JPMorgan who has helped expand Noble’s oil business in the Americas — a growing area of focus for the company.
The commodity house has been under fire for 15 months since allegations of aggressive accounting practices surfaced. Noble has denied any wrongdoing and defended its accounting practise of booking profits on long-term commodity contracts, some with a duration of a decade or more.
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