Noble Group, the crisis-hit commodity trader, said it had slumped to a loss of almost $5bn last year, hit by a raft of charges and impairments as it battled for survival.
The Singapore listed-company said the result for 2017 was made up of $1bn of losses from discontinued operations as well as $3.24bn of exceptional charges, including a $2.1bn hit to the value of a controversial derivatives portfolio.
The record loss comes as Noble seeks to garner support for a debt restructuring deal that would see shareholders all but wiped out and control of the company handed to its senior creditors.
Noble recorded a loss of $4.93bn in the year to December, against a net profit of $8.7m in 2016. Revenue from its continuing operations dropped from a restated $8.667bn a year earlier to $6.24bn, and trading volumes were down 27 per cent to 77.8m tonnes.
In spite of the loss, which it had flagged earlier this month, Noble said its board was “satisfied that the group can continue as a going concern” until the debt restructuring is completed.
Under the deal, Noble’s $3.4bn of senior debt will be halved and creditors will receive a 70 per cent stake in the restructured business. Management will get up to 20 per cent and existing shareholders 10 per cent.
“The total net loss for 2017 created a negative net asset position for the Group. However, the board believes that the proposed restructuring, once implemented, should restore shareholders’ equity and create a sustainable capital structure which will allow the Group to rebuild its business in Asia where it continues to enjoy a market leading position,” the company said in a statement.
Once a leading force in commodity trading, Noble has been in turmoil since February 2015 when Iceberg Research, a previously unknown group, produced the first in a series of reports highly critical of the company and its inability to convert profits into cash. Noble has always defended its accounting.
Over that period, Noble has announced huge losses, impairment charges and sold a string of assets, including its prized oil trading business in a desperate attempt to pay down debt. Its market value, meanwhile, has tumbled from more than $6bn to just $170m today.
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