A Noble Breed

Last week, our sister publication Freshly Minted reported on Maersk’s successful EUR 750 million (USD 1.3 billion) five-year bond. This was the shipping conglomerate’s first bond issuance, following a recent equity offering of USD 1.7 billion. In Asia, commodity trading house Noble Group has likewise found tremendous success in raising funds, suggesting that investors and bankers are getting warmed up to investing cash again. Continue Reading

Pipavav Shipyard

This week, we are impressed to see another shipyard finding success in the IPO market. This makes India’s Pipavav Shipyard the third successful shipbuilder to raise equity following Taiwan’s China Shipbuilding Corporation and Malaysia’s TAS Offshore since the beginning of this year.

Pipavav Shipyard will soon be listed on the Bombay Stock Exchange and National Stock Exchange upon the completion of its book building. The private shipyard has offered its shares at a price band of Rs 55 – 60 a piece and plans to raise between Rs 4.7 billion (USD 98 million) and Rs 510 billion (USD 106 million). This amount is significantly lesser than the USD 200 million it had previously planned when the shipyard registered its IPO during the first quarter of 2008. Out of the 85.45 million shares on offer, 2.6 million shares have been set aside for the employees. We have provided a summary of the transaction in the Guts of the Deal table that follows. JM Financial Consultants, Citigroup Global Markets India, Enam Securities and SBI Capital Markets are the appointed bookrunners for this IPO. Continue Reading

CIC Spends USD 850 million on Noble

Commodity trader Noble Group has placed 573 million shares to China’s sovereign wealth fund, China Investment Corporation (“CIC”), for a total consideration of USD 850 million. The issue price of SGD 2.1137 (USD 1.4956) was a 7.34% discount to the weighted average price of Noble shares traded on the Singapore Exchange between September 14 and September 15. In return, CIC is now a 15% shareholder in Noble and could play a larger strategic role in the group’s diverse agricultural activities, taking into account China’s strong appetite for commodities. CEO Richard Elman will reduce its shareholdings by 2% or 135 million shares while Noble will issue 438 million new shares to raise additional capital to pursue strategic investments in key agricultural markets globally. Continue Reading

The Week in Review

The week has been relatively quiet from a transaction standpoint, but sentiment by and large is upbeat. The shipping markets as a whole continue to perform above expectations, and the credit and equity markets functioning smoothly, if not lavishly.

For example, Caterpillar Financial Services this week entered into an agreement to increase Aker Philadelphia Shipyard’s credit line by $150 million. Under the agreement, Caterpillar will fund up to $80 million in construction costs for seven consecutive product tankers, valuing the full agreement at $560 million. Interest payments will be required only during the construction period, and Aker may apply the funding to up to three ships simultaneously. The deal takes care of financing for the remainder of the 12 Jones Act tankers under construction at the yard, which are to be sold to Aker American Shipping for bareboat charter to OSG America. Four these tankers have been delivered, three are currently under construction, and the remainder are to be completed by 2011. Continue Reading

Noble Prices $700 million Bonds at T+225 – JP Morgan Sole Books

NOBLE GROUP: DEFINITIVE DYNAMISM

By Urs M. Dür

Noble: Dollars and Sense

No matter what one thinks of it, the first thing one notices when one walks into the office of Richard Elman – 61, Chairman (holding a 51% stake in the company) of the Hong Kong based, Singapore listed, Noble Group, a leading industrial, agricultural, transport and logistics provider in Asia – is the artwork on the walls. Especially as the popular press likes to point out that he had a short stint as a hippie in San Francisco in 1969, most striking is a large painting of Herbert von Karajan, the superlative late conductor of the Berlin Philharmonic, placed, if I recall correctly, behind the chairman’s desk. In one of his famous poses, Karajan is head slumped in deep thought reminiscent of Rodin’s “Thinker.” Karajan was noted for his precision, innovative interpretation, disdain for sloppiness and competitiveness. Rivaled in fame only by Leonard Bernstein during his tenure, he remained unique and independent: Bernstein had Tanglewood, but Karajan had Salzburg – and his Porsche.

Now a man’s choice of art does not necessarily indicate his full range of qualities. However, if one is familiar with Karajan, then one is familiar with the values noted above and they are displayed in the dynamism and performance of the Noble Group.

The Noble Group (Singapore: NOBL) is a diversified company. In a global operation with over 600 employees it supplies industry with the raw materials (sugar, steel, etc), trades those commodities and transports those resources to the customer via a fairly vertical operation. It reminds one of a small Cargill. One will note from the extensive list of companies (see Corporate Facts page 23) they operate and the relatively small number of employees that there must be close interaction between the teams. So while the company could be construed as having a lack of focus to the layman, it does act as one.

Continue Reading