Noble Group Shares Advance as Goldilocks Builds Up Its Stake

  • Abu Dhabi fund’s holding rises to 8.2%, nearing CIC’s interest
  • Trader seeking new strategic investor to restore confidence

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Noble Group Ltd.’s newest major shareholder, Goldilocks Investment Co., has raised its holding in the embattled commodity trader and now controls almost as much equity in the company as China’s sovereign wealth fund. The stock gained.

The Abu Dhabi fund increased its stake to 8.19 percent from 5.03 percent after adding 41.6 million shares on July 6, according to an exchange filing on Monday. That makes it the fifth-largest holder after China Investment Corp., which has a 9.61 percent holding, according to data compiled by Bloomberg. On Tuesday, the stock rose 4 percent to close at 65 Singapore cents.

Noble Group is seeking a strategic investor to restore confidence after a collapse in its securities, and Goldilocks’ move follows an agreement between the company and its banks to extend a $2 billion credit facility -- albeit just for 120 days -- allaying immediate concerns Noble could default. Goldilocks, which is controlled by investor Jassim Alseddiqi’s Abu Dhabi Financial Group, first disclosed a major stake on June 22.

While the stock has rallied since then, it’s still down over 60 percent for the year. The company, once Asia’s largest commodity trader, has endured several turbulent years marked by losses, credit-rating downgrades, and accusations of improper accounting that it has denied.

Abu Dhabi Financial Group’s media representatives didn’t respond to requests for comment. 

“There’s always a price that somebody will see value and perhaps they have,” Nicholas Teo, a trading strategist at KGI Securities (Singapore) Pte, said by phone. “Is it strategic? We will only see as they continue to accumulate.”

Even after the reprieve on credit, Noble Group remains under the gun. Fitch Ratings Ltd. has said it doesn’t expect a meaningful recovery in the trader’s ability to generate profit this year, while the risk of default hasn’t gone away, according to a Goldman Sachs Group Inc. note on July 7, which cited earnings uncertainty and cashflow pressure.

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