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Noble Group sells North America energy unit to Calpine Corp

Noble Group sells North America energy unit to Calpine Corp Noble Group sells North America energy unit to Calpine Corp
Remigio Civitarese | 10 Ottobre, 2016, 09:16

Asian commodities trader Noble Group on Monday announced the sale of U.S. energy unit Noble Americas Energy Solutions (NAES) to Calpine Corporation for US$1.05 billion (S$1.44 billion), comprising US$800 million plus a repayment of US$248 million worth of NAES working capital.

The divestiture, which is expected to close in Dec 2016, releases about US$275 million in letters of credit and surety bonds. He said the company's strategy of getting out of asset-heavy businesses rather than chase "overpriced assets" was a positive as it would help it focus on its core operations. This sale will help the company restructure and rebuild investor confidence after an embarrassing commodities downturn, mounting losses and a liquidity squeeze. Elman also said he's still seeking a strategic investor.

Noble Group's shares have rallied in Singapore in the run-up to Monday's announcement of the disposal, buoyed by expectations the deal would be completed this quarter, as well as decisions by some major holders to boost their stakes.

The San Diego-based NAES business offers supply and risk-management services to commercial and industrial customers, buying energy wholesale for sale as retail products, according to the annual report. Houston-based Calpine is an independent power producer.

Noble's former CEO Yusuf Alireza, a former Goldman Sachs Asia co-head, quit unexpectedly in late May after helping Noble secure US$3 billion in credit facilities and within days, the company announced a US$500 million cash call.

Noble Group has been assailed in the past 20 months by the plunge in commodity prices, questions over its accounting and a sinking share price.

It will take between one and two years, to get the company to the right size and back to profitability, Elman said last month.

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