Hong Kong

Noble Group Ltd.’s sale of its oil business to Vitol Group probably buys the embattled commodity trader time. But even if it survives long enough to complete the deal, there’s still an almighty struggle ahead: the near-inevitable restructuring of over $3 billion in debt, Bloomberg News reported. Analysts at BNP Paribas SA, Nomura Holdings Inc., JPMorgan Chase & Co. and iFast Corp. all predicted after the sale was announced on Monday that the Hong Kong-based company would be forced to restructure its debt.

Noble Group Ltd. suspended its shares from trading in Singapore on Friday pending the announcement of a major transaction, with the commodity trader seeking to clinch a sale of its oil-trading unit in a deal that may be critical to the company’s prospects for survival, Bloomberg News reported. The stock was halted at 38 Singapore cents, 2.6 percent lower, after the Hong Kong-based company’s announcement, which was released just after midday in the city-state, and didn’t give details of the planned deal. The shares have sunk 78 percent this year amid concerns that Noble Group will default.

Vitol Group’s negotiations to buy Noble Group Ltd.’s oil trading unit are “very complicated” and may not end in a deal, the chief executive officer of Vitol said, adding to pressure on his Hong Kong-based rival, Bloomberg News reported. The sale of the oil business is crucial to the survival of Noble Group, once Asia’s largest commodity trader. It is rushing to sell the unit in order to pay back about $1 billion of debt under its secured credit facilities, of which the largest matures in mid-January.

Noble Group Ltd., the commodity trader struggling to avoid a default, has set out why it received millions of dollars less from the sale of its North American gas and power unit than the company had previously indicated, responding to queries from the Singapore exchange, Bloomberg News reported. The figures differed because the unit’s working capital shrank, cutting the amount that needed to be paid by Mercuria Energy Group Ltd., Noble Group said in a statement on Monday. The illustrative sum given earlier by Noble Group also didn’t take into account funds that were placed in escrow, it said.

Credit-rating agency Moody’s downgraded HSBC’s Hong Kong unit, citing rising macroeconomic risks in in Hong Kong, China, Australia, Singapore, Taiwan and Malaysia over the last two years. Moody’s downgraded The Hongkong and Shanghai Banking Corp’s long-term issuer rating to double A three (Aa3) to double A two (Aa2), the Financial Times reported.

The International Swaps and Derivatives Association (ISDA) committee tasked with making a ruling on the tussle over Noble Group’s credit-default swaps has issued a verdict that could halt attempts to settle the derivatives contracts bilaterally, the Financial Times reported. In a statement on Tuesday, the committee – which is made up of representatives of banks and investors – said that attempts to trigger the contracts bilaterally are only valid if backed up with supporting documentation.

Commodity merchants Vitol and Mercuria are on the shortlist to buy Noble Group’s $1bn Americas-focused oil business as the debt-laden trading company scrambles to pay down debt to avoid bankruptcy, the Financial Times reported. Noble has asked the shortlisted bidders to submit formal offers before the end of the month when it hopes to announce a deal for the oil unit, according to people with knowledge of the process.

Pressure is building on an International Swaps & Derivatives Association panel of investors and bankers to end Noble Group Ltd.’s credit-default swap impasse, Bloomberg News reported. ISDA’s determinations committee will meet Wednesday to reconsider whether Noble triggered a credit event -- the precondition for a payout on CDS contracts -- when it arranged a 120-day extension to a loan facility in June.

In a related story, the Financial Times reported that struggling commodity trader Noble Group said it expects to find a buyer for its global oil business this month, as it continues to shrink its operations in a bid to stave off defaulting on its debts. Speaking at a special general meeting in Singapore, where the Hong Kong-based trader is listed, chairman Paul Brough told investors the sale should be agreed by the end of September.

The International Swaps and Derivatives Association (ISDA) said it will publish a statement on Wednesday addressing the widespread confusion around Noble Group’s credit-default swaps, which has pitted the world’s biggest investment banks against each other in a tussle over payouts on the credit derivatives, the Financial Times reported. While the debt-laden commodity trader has not formally defaulted on any debt, buyers of CDS linked to Noble claim that a recent extension to loan repayment terms amounted to a debt restructuring — which can also trigger payouts.