Noble

Noble: Newswires reported that Noble is in advanced talks with Chinese food giant Cofco to sell its remaining 49% stake in its agricultural unit, Noble Agri, for US$700m. Just a year ago, Cofco had forked out US$1.5b for its initial 51% stake in Noble Agri.

Analysts guide that a potential stake sale is likely to be seen as a positive move for the “embattled” Noble, especially at a time when tumbling commodity prices are making asset sales challenging.

The stake sale is also likely to take some pressure off Noble’s earnings, given that JV and associate contributions in recent quarters had been largely weighed by losses from Nobel Agri, primarily as a result of lower sugar prices.

In response to the latest news, Noble confirmed in an SGX announcement that it was in advanced talks for a potential stake sale, although the commodities trader stopped short of disclosing the buyer and the value of the sale.

Noble recently announced that It was looking to raise more than US$500m either via asset disposals or other transactions, with major credit rating agencies like Moody’s and Standard & Poor’s guiding that they were likely to downgrade the group’s investment grade rating to “junk status” if its financials did not improve.

At the current price, Noble trades at 0.4x P/B.

The street has 5 Buy and 6 Hold ratings with a consensus TP of $0.65.