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Noble Group sells North America energy unit to Calpine Corp

Singapore-listed Noble Group agrees to US$1.05b sale of energy unit Noble Group to sell US unit to Calpine for $1.05b
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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