SINGAPORE – Noble Group, the commodity trader seeking to push through a restructuring after losing billions of dollars and defaulting, has filed a claim in Australia against two coal producers for alleged breaches of contractual obligations under a marketing services agreement.
The Singapore-listed company, which will report another loss later this month, said a unit has filed the claim in the Supreme Court of New South Wales against Yancoal Australia and Gloucester Coal for damages estimated at at least $127-million, according to an exchange statement on Friday.
After being locked in a battle for survival for years, Noble Group has secured approval from most of its senior creditors for the restructuring, as well as from about a third of its existing shareholders. The company’s drawn-out crisis has prompted speculation that some of its suppliers make seek an opportunity to walk away from contracts, putting at risk Noble Group’s ability to provide raw materials to customers in Asia. The claim relates to a marketing-services agreement entered into in 2011, according to the statement.
“We’re taking the appropriate time to review the claim and it’s too early for us to provide any further comment at this time,” James Rickards, Yancoal’s GM of investor relations and corporate affairs, said by phone.
Noble Group remains a minor shareholder in Yancoal, according to Bloomberg data, after its holding was diluted. The valuation of that initial holding, as well as its treatment of long-term contracts, had drawn particular scrutiny from its most consistent foe, Iceberg Research, one of several companies to criticize the trader’s accounting. Noble Group consistently rejected the criticism.
Last week, Noble Group said it expects an overall net loss of $115-million to $140-million, driven mostly by restructuring expenses and finance costs for the quarter to June. Still, the trader also sees profit before interest, tax and restructuring costs of $35-million to $50-million in the period as operating income from supply chains covered expenses.