Hong Kong-based Noble Group (SGX: N21), one of the top three independent global LNG traders, said it will shortly start the sale process for Noble Americas Energy Solutions. Since energy markets in the United States began deregulating more than 10 years ago, Noble Americas has emerged as one of the leading retail energy suppliers.
The company also announced the resignation of CEO Yusuf Alireza, and his replacement by William Randall and Jeff Frase, who were appointed as Co-CEOs.
Noble Group shares closed down 8.20% at S$0.28 on the Singapore Stock Exchange, giving the company a market value of S$1.83 billion ($1.32 billion).
“I am delighted that Will and Jeff will be leading Noble Group’s operations as we embark on the Company’s next chapter. Their complementary commodities expertise and geographical focus will be hugely valuable as we position ourselves for the future,” said Richard Elman, who is continuing in his role as chairman and executive director.
Randall, based in Hong Kong, is currently president of Noble Group and an executive director, and will retain his board seat. Frase, based in Stamford, Connecticut is currently president, Noble Americas and head of Oil Liquids, and will be invited to join the board.
“The year 2015 must surely go down as one of the most challenging that the commodity markets have had to endure for many decades,” Alireza recently stated. “Supply flooded many sectors, from bulk shipping through to oil and gas, as exporter currencies fell and production costs were often reducing in line with selling prices. These cyclical factors, which surely must balance themselves at some stage, have been further compounded by structural changes in markets, principally caused by a moderation of the strong infrastructure spend in China.”
Noble Group was accused last year of overstating its assets by billions of dollars, seeing its market value drop by nearly 75%, and its debt downgraded to junk status.
“As a result of this difficult environment, our focus – ahead of all other considerations – has been and will continue to be on maintaining adequate liquidity and generating cash. With that in mind, we have been forced to make some difficult decisions, closing certain businesses and selling assets. We feel this continues to be the right focus, and those actions, although tough, were the right decisions for the current environment,” he added. Alireza, the former co-president of Goldman Sachs in Asia, had joined Noble in 2012.
“Mr. Alireza has helped guide Noble through a very challenging period, moving the company to an asset light, merchant focused model; he played a pivotal role in the successful sale of Noble Agri to a group of investors led by COFCO, and has also been instrumental in securing the recently announced re-financing, a crucial element in the process of giving the group a stable base from which to develop,” the company said in a statement. “With this transformation process now largely complete, Mr. Alireza considered that the time was right for him to move on.
In March 2016, Noble Group completed the sale of its remaining 49% stake in Noble Agri to COFCO International Ltd. for US$750 million in cash, with the additional retention of upside participation
in the future growth of Noble Agri, worth up to US$200 million. Noble is using the entire proceeds of the disposal to pay down debt.
Noble Group manages a portfolio of global supply chains covering a range of industrial and energy products. Operating from over 60 locations, Noble facilitates the marketing, processing, financing and transportation of essential raw materials. Sourcing bulk commodities from low cost regions such as South America, South Africa, Australia and Indonesia, the group supplies high growth demand markets, particularly in Asia and the Middle East. The company is ranked No. 77 in the 2015 Fortune Global 500.
Noble Americas is a leading power marketer focused on offering supply and risk management services to commercial and industrial customers. Strategically, the company acts as a conduit for customers to manage their price and energy risk exposure. It buys energy wholesale and repackages that energy into retail products. It continually develops products and risk management tools that change the manner in which customers think about, and manage, their energy expenditure. The company has grown its gross margin and EBIT nine of the last ten years and its retention rates are among the highest in the industry.
Noble Americas has been recognized for changing the face of US deregulated power by providing an industry leading web-enabled risk management solution, PowerFolio3D. This platform provides customers with the ability to analyze their potential risk to produce strategies, and to mitigate that risk and enhance the value in their portfolios.
It currently operates out of six locations – its headquarters are in San Diego, with regional offices in Boston, Michigan, Chicago, New Jersey and Houston. The company has 210 employees and is currently the fifth largest commercial and industrial retail marketer in the US according to DNV-GL, formerly Kema. It has approximately 1,300 consumer clients and over 100,000 meters with demand requirements of approximately 8,000 MW per year.
Noble Americas provides retail electricity in all 19 deregulated states in the US and natural gas in the Western US, primarily California and Nevada. During 2015, on average, the company invoiced 85,500 accounts per month with a 99.95% accuracy rate. It was also awarded an extension to ISO 9001:2008 certification, which is a robust process and procedure audit.