Noble Group will sell Oil business to Vitol US Holding

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Noble Group said that it will sell its Americas-focused oil business to rival Vitol US Holding Co. in a deal worth about USD576m, with the proceeds used to settle its debts.

This was confirmed in a stock exchange filing stating that the sale is expected to close by the end of 2017 and prior to the 15 January 2018 maturity date of the NAC BBF.

According to the statement which also highlighted the companies third quarter result, the sale may help generate cash proceeds of about USD582 million.

The Group today has separately announced that it has entered into a binding stock purchase agreement for the sale of its wholly-owned subsidiary NAC to Vitol US Holding Co. The Global Oil Liquids business is primarily conducted through NAC. The sale is subject to, amongst others, approval by Group shareholders, expiration of the Hart Scott-Rodino waiting period, certain other required regulatory approvals and lender approval under the NAC BBF. Further information is available in the Group’s announcement “Proposed Disposal of All the Issued and Outstanding Capital Stock of Noble Americas Corp” released concurrently with this announcement. The sale is expected to close by the end of 2017 and prior to the 15 January 2018 maturity date of the NAC BBF; and

Wind-down of certain Global Oil Liquids working capital within Noble Clean Fuels Limited: the Group is in the process of winding down certain remaining Global Oil Liquids working capital balances within NCFL. This process includes the collection and settlement of working capital items and the roll-off or settlement of certain contractual commitments. The wind-down process is expected to conclude by the end of 2017 and the Group expects to retire the NCFL BBF prior to the 17 February 2018 maturity date. As at 30 September 2017, the Group had repaid all loans drawn under the NCFL BBF and utilisation under the facility related entirely to the issuance of letters of credit. Following the completion of the wind-down process, the Group will retain its existing LNG and Asia-focused distillates businesses, which operate under NCFL and which remain complimentary to the Hard Commodities businesses. Working capital financing requirements for the retained LNG and Asia-focused distillates businesses will be financed under the Group’s existing trade finance lines.

Purely for illustrative purposes, excluding net proceeds from the wind-down of certain remaining Global Oil Liquids working capital balances within NCFL and based on the latest announced unaudited consolidated financial statements of the Group as at 30 June 2017, aggregate proceeds to the Group from the proposed sale of NAC5 would have been approximately US$1,418 million and net proceeds, following repayment of loans drawn under the NAC BBF, would have been US$582 million6.

The timing of cash proceeds from the proposed sale of NAC will be subject to escrow requirements and the final consideration received will take in to account operating expenses of NAC borne by the Group to the closing date and other adjustments in accordance with the terms and conditions of the stock purchase agreement.

Meanwhile, Vitol had earlier announce that it had agreed to acquire Noble Americas Corporation subject to certain conditions precedent.

Vitol is an energy and commodities company; its primary business is the trading and distribution of energy products globally – it trades over seven million barrels per day of crude oil and products and, at any time, has 250 ships transporting its cargoes. Vitol’s clients include national oil companies, multinationals, leading industrial and chemical companies and airlines.