Noble Group 01 (May 08 - May 10)

[winston]

From Wikipedia, the free encyclopedia

Contango is a term used in the futures market to describe an upward sloping forward curve (as in the normal yield curve). Such a forward curve is said to be "in contango" (or sometimes "contangoed").

Formally, it is the situation where, and the amount by which, the price of a commodity for future delivery is higher than the spot price, or a far future delivery price higher than a nearer future delivery. This is a normal situation for equity markets. [1]

The opposite market condition to contango is known as backwardation.

[kennynah]

the more pertinent question to ask is why certain commodities exhibit contango or backwardation price structures...

[grandmaster89]

Noble Group Strengthens Senior Management

17 December 2009 Hong Kong

In the interests of business continuity and succession planning, the Board of Directors of Noble Group is pleased to announce a high-level restructuring of key positions that will take effect from 1 January 2010. The Group has always been conscious of its duty to its staff, shareholders, and financiers in ensuring that plans are made well in advance and are shared publicly. On this occasion they have sought to address the issue of smooth succession planning within the company.

The founder and CEO of the Group, Richard Elman, expressed a wish some time ago to allow the senior management of the Group to grow and evolve. The goal is to enable senior management to grow into their new responsibilities while at the same time providing all stakeholders with the comfort that Richard Elman is still spearheading the Group’s strategy and intimately involved in the Group’s daily operations. As a result the Board, on the recommendation of the Nomination Committee, has appointed Mr. Elman to the role of Executive Chairman.

Mr. David Eldon, the current non-executive Chairman, who has been from the outset closely involved in planning all stages of this evolution, will remain on the Board as Senior Independent Non-Executive Director. Mr. Eldon remains deeply committed to Noble and to ensuring the Group continues to pursue the highest standards of corporate governance.

As an important step in this evolution, the current Chief Operating Officer of the Group, who is also a main Board director, Mr. Ricardo Leiman will assume the post of Chief Executive Officer of the Group and directly report to both Richard Elman and the Group’s long-time Vice Chairman Mr. Harry Banga. The Board wishes to stress that Mr. Elman is in robust health, energetic, and is keenly committed to Noble’s continued growth and prosperity.

The Board is also pleased to announce the return of Tobias Brown, formerly non-executive Chairman of the Group, who will, as a non-executive Director, add his considerable wealth of experience to the Board. Mr. Brown has also agreed, that should Mr. Elman ever become incapacitated, he would exercise stewardship over the Elman family interests in the Noble Group to ensure the company will be run in a fashion which is consistent with both Mr. Elman’s business values and long-term goals.

On behalf of the Board, Mr. Eldon said, “I believe we have created a situation that gives us the best of all worlds. We retain Richard’s knowledge, commitment, and dedication to the company he founded. Coupled with this we will benefit from his daily oversight which should be of considerable comfort to the many stakeholders in the Noble Group. At the same time we have been able to strengthen the Board with the return of Toby Brown, and we have created a superbly strong executive senior management team through the appointment of Ricardo as CEO. For Richard to assume the Chairmanship is, in my view, a totally logical evolutionary step, and I am more than happy to carry on supporting him from my new position”.

Richard Elman said, “I am delighted that the Board has put forward these proposals and I believe they not only recognize my desire to create a proper succession plan for the Group, but it also allows me in a meaningful way to ensure the process unfolds exactly as they should. I believe that the new structure is a firm foundation for our next phase of growth”.

“I would like to thank David Eldon for all that he has done so far in getting us to focus on such an important issue, and for his selflessness in stepping back from the Chairman’s role to allow me to remain as a positive influence in the company. I am also pleased to welcome back Toby Brown whose counsel will be invaluable to the Board.”

[winston]

Not vested. I thought Noble is a "builder" rather than a trader ..

DJ Macarthur Coal In Advanced Talks With Noble Over Gloucester -Source

SINGAPORE (Dow Jones)--Macarthur Coal Ltd. (MCC.AU) is in advanced talks with Noble Group (N21.SG) to buy its 87.7% stake in Gloucester Coal Ltd. (GCL.AU) and the deal may be announced as early as Tuesday, a person familiar with the situation said.

The person told Dow Jones Newswires that talks are focusing on a 'minimum 15% premium' over the A$7 per Gloucester share that Noble paid in May.

'The premium depends on the structure of the transaction. It could be higher.'

Noble prefers an all cash offer but a combination of shares and cash is also on the table.

Both companies entered trading halts earlier Tuesday pending announcements. Citic Resources Holdings Ltd. (1205.HK), which controls Macarthur Coal, is also halted.

If the deal goes through, it will further consolidate Australia's mining industry.

This is the second takeover bid this year for Gloucester, which has a market capitalization of about A$537 million, after Hong Kong-based Noble took control of the company after May's A$7-a-share offer.

Source: Costas Paris, Dow Jones Newswires

[grandmaster89]

Noble's All-Share Deal Seeks To Create Australia's Biggest Coal Producer.

Noble Group is proposed to -

a) Dispose 71,902,868 Gloucester Shares for 60,398,409 Macarthur Shares,

b) Dispose of at least 255,680,000 Donaldson and of shares of 81,450 Middlemount Shares for 22,505,155 Macarthur Shares

The All Scrip Offer implies a Gloucester Offer price of US$7.21 (A$8.16) per Gloucester security1 valuing the Gloucester Shares at A$668.5 million (US$591.3 million) on a fully diluted basis and Noble’s 87.7% shareholdings in Gloucester at A$586.3 million (US$518.6 million).

Accordingly, it is proposed that the Group will acquire 82,903,564 Macarthur Shares (the “Acquired Shares”) representing approximately 24 per cent. of the enlarged share capital of Macarthur comprising 60,398,409 Macarthur Shares from the Gloucester Offer and 22,505,155 Macarthur Shares from the Donaldson Disposal and Middlemount Disposal

Commentary:

Commenting on the transactions, Richard Elman, Noble's Chief Executive Officer said “These Transactions validate the importance we place on adding value at all stages of the supply chain for the key commodities in which we trade. The combination of these highly complementary assets will provide Noble with exposure to what will be the largest independent coal producer in Australia, a critical supplier to the Asian growth markets.”

Ricardo Leiman, Noble's Chief Operating Officer added, “Noble remains focused on the strategic importance of Australia and the Asia Pacific region in supplying coal and energy to emerging and developing markets. We are excited about becoming a cornerstone investor and the largest shareholder in what will truly be Australia's leading independent coal producer with multiple operations providing scale, geographic and product diversity.”

William Randall, Head of Noble’s Energy Coal and Carbon Division commented, “These transactions provide Noble with an opportunity to consolidate its coal interests in Australia and continue to promote growth of independent coal suppliers in this region whilst extracting value from the strategic benefits of combining these operations. Macarthur has an attractive pipeline of projects, which Noble looks forward to being part of. We believe over the next 10 years we can support Macarthur to develop its project pipeline and increase its scale and size as an independent ASX-listed coal producer."

[winston]

NOBLE GROUP Noble, which owns 87.7 percent of Gloucester, said on Tuesday Macarthur will buy Gloucester by issuing 0.84 Macarthur shares for every one Gloucester share, totalling the value of A$668.5 million ($591.3 million).

Gloucester shares surged as much as 25.5 percent on Wednesday after it resumed trading following the takeover offer.

[winston]

CEO on Bloomberg now.

[grandmaster89]

CEO on Bloomberg now.

Must wait for them to upload it on their website bah!

[winston]

Not vested. From Lim & Tan:-

NOBLE GROUP
Serving Rising Needs Of China & India S$3.01-NOBL.SI

Noble has proposed the following disposals to Macarthur Coal of Australia:

- 87.7% stake (71,902,868 shares) in Gloucester Coal by accepting Macarthur’s offer of 0.84 Macarthur share per Gloucester share, valuing the stake at A$586.3 mln or A$8.16 each, based on Macarthur’s A$9.71 close. Noble will receive 60,398,409 Macarthur shares or 17% of the latter’s enlarged capital. (There is a cash option of A$8
per Gloucester share.)

- 79.9% stake (255.68mln shares) in Donaldson Coal for A$185.8 mln to be satisfied by a
combination of A$48 mln cash and 14.21 mln Macarthur shares.

- 25.34% stake (81,450 shares) in Middlemount Coal for A$207.5 mln, A$127 mln cash and 8.29 mln Macarthur shares. (Middlemount is a JV between Noble and Macarthur.)

Noble will end up with a 24% stake (82,903,564 shares) in the much-bigger MacArthur Coal (indeed, the largest independent coal producer in Australia), which has a
market cap of A$2484.5 mln yesterday. While Gloucester operates the Stratford and Duralie mines, which produce coking and thermal coal, in New South Wales, Macarthur operates the Coppabella and Mooorvale mines in the Bowen Basin in Queensland,
which produce the low volatile PCI coal.

The above transactions are subject to a series of conditions by Feb 28’2010, eg approval by Australia’s Foreign Investment Review Board, the Gloucester offer becoming unconditional, approval from shareholders of Macarthur etc.

Comments

1. We believe the proposed transactions are positive for Noble (as well as Macarthur as evidenced by the market reaction this morning).

2. The combined book value of Noble’s stakes in Gloucester, Donaldson and Middlemount adds up to US$723.292 mln, vs US$821.6 mln for the Macarthur shares it will receive. However, the combined net profits before tax of US$52.158 mln is US$4.88 mln above US$47.28 mln attributed to the Macarthur shares.

3. The transactions are also positive in that:
- They increase Noble’s exposure to coal mining / production in Australia, an important supplier of coal to China and India.
- They help reduce Noble’s dependence on the highly volatile trading activities, and raise exposure to actual producing assets, which are in keeping with the Glencore model.

As Noble’s COO said the transactions “validate the importance we place on adding value at all stages of the supply chain for key commodities in which we trade”.

- We believe having China Investment Corp (CIC) as a substantial shareholder helps.

- It is worth noting the 3 substantial shareholders of Macarthur: Citic Resources of China with a 22.4% stake currently (16.9% after); Arcelor Mittal with 16.6% (12.52%) and Posco of South Korea, with 8.3% (6.3%).

4. Although Noble had recently slightly exceeded our target of $3.20, hitting intra-day high of $3.26 on Dec 9th, we believe there is further upside, now that we are seeing
benefits of the CIC connection coming through.

5. We therefore maintain BUY, especially if the current weakness in commodities, as a direct result of the strengthening US$, continues.

[winston]

Not vested. From CIMB:-

Valuation and recommendation

Maintain Outperform and target price of S$3.70.

We maintain our Outperform rating on Noble for its:
1) strong earnings momentum;
2) solid management track record; and
3) firmer control of the supply chain. We see stock catalysts from increasing evidence of a global economic recovery driving higher commodity prices and margins.

Target price remains S$3.70, based on 8.0x CY11 EV/EBITDA, one standard deviation above its mean since Jan 04. We expect Noble to trade above its mean as we are in an economic recovery phase.