Noble Group warns it could lose $1.7b

Even asset sales might not be enough to conquer its $2.1b debt.

Things went downhill for Noble Group after it said it will post a net loss of $1.7 to $1.8b for Q2, according to a Moody’s Analytics report.

Noble Group also said they would report an adjusted operating loss of $250-300m from supply chains. This fared worse than last quarter’s $3m.

According to Moody’s Investors senior analyst and vice president Gloria Tsuen, “The profit warning is credit negative for Noble and increases the challenges the company faces while turning around its operations and tackling large debt maturities over the next 12 months.”

Noble has also announced that it would sell its North American gas and power businesses to Mercuria Energy America Inc. for $248m.

It will also leave its global oil and liquids business and dispose related assets for the next two years.

“The company’s forecast of deteriorating second-quarter financial results will keep default risk elevated. Although the company plans to dispose of key assets to reduce debt, it is uncertain whether these sales will raise sufficient proceeds to meet its $2.1 billion of debt maturities over the next 12 months,” Tsuen said.