Sinochem looks to Noble Group stake to boost trading prospects

Chairman and founder of Noble Group set to retire this year

China’s state-owned Sinochem is discussing the possibility of a stake in embattled commodity trader Noble Group, a Hong Kong headquartered company listed on the Singapore Stock Exchange.

Observers suggest Sinochem’s leading motive for such a move is the chance to access Nobel’s global trade platform and further its ambitions as a global energy trader.

While Noble Group acknowledged it was in talks with an unnamed party, neither Sinochem nor Noble Group have given any indication of the size of the mooted stake.

After a number of difficult years that has seen Noble Group offload assets, complete a rights issue, restructure its operations and raise US$2bn as a result, a significant investment from Sinochem coupled with rising commodity prices might see Noble Group out of the woods. But in a submission to the Singapore Stock Exchange the commodity trader offered a note of caution.

“…No binding arrangements have as yet been entered into with respect to this possible transaction and, accordingly, there can be no assurance that this transaction will be concluded.

China Investment Corp, a Chinese sovereign wealth fund participated in Nobel Group’s rights issue last year, picking up a 9.6% stake. Noble Group chairman and founder Richard Elman owns 18% of the company. He is expected to retire some time before the summer.

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