Noble Group Ltd said on Tuesday it would sell its remaining 49 percent stake in its agribusiness to China's state-owned COFCO International Ltd, exiting agricultural markets as Asia's biggest commodity merchant seeks to slash debt.
The $750 million cash deal will hand COFCO full ownership of Noble Agri, which will be renamed COFCO Agri. It will handle everything from corn to sugar to cocoa and fertilizer, as China, the world's top commodities buyer, seeks greater access to food.
The purchase will also expand COFCO's global footprint in agricultural markets, rivalling the "ABCD" quartet of companies -- Archer Daniels Midland, Bunge, Cargill [CARG.UL] and Louis Dreyfus [AKIRAU.UL]. COFCO bought an initial 51 percent stake in Noble Agri in April 2014.
"The
acquisition will greatly accelerate COFCO's internationalization and
global positioning," Chairman Frank Gaoning Ning, said in a statement,
adding that COFCO was bullish on the long-term outlook for the business.The terms of the deal also include an additional deferred payment of up to $200 million if the business is listed on a stock market or sold, and also based on the unit's future performance.
For Noble, the deal is a major step towards helping it retain its investment grade credit rating and repair investor confidence after a bruising accounting dispute.
Noble said the proceeds will go toward paying off debt, which stood at $4.2 billion at end-September, exceeding Chief Executive Yusuf Alireza's pledge last month to raise $500 million through asset sales and strategic partnerships. The deal will also result in a non-cash loss of $546 million.
Source: http://www.reuters.com/article/us-noble-cofco-agriculture-idUSKBN0U606L20151223
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