The website ‘noblebankruptcy.com’ was recently registered, see the published WHOIS registration record below:
We monitor these new WHOIS website registration records for keywords (searchable through elastic search, see Predicting Bankruptcy Filings with WHOIS Records) such as this and believe we are the first to discover this record.
Noble has been under attack for the better part of a year for potentially fraudulent accounting practices (many of which are detailed by Iceberg Research), forcing Noble to write down assets and continue to raise capital. The company recently completed a ~$500mm rights offering (in which its former Chairman Richard Elman minimally participated), but major credit/liquidity issues remain for the company.
If Noble’s $5BN+ of positive PV trades were marked correctly, why didn’t the company sell these instead of issuing new equity at a roughly 60% discount through the rights offering? After selling most of the company’s good assets and rolling into new debt at higher interest rates, what will the company own as a going concern besides mismarked coal trades and mismarked minority interests in ‘associates’ (of which they actually own under 20%) such as Yancoal?
While there is no guarantee that this website is linked with the Noble Group, given the date of the filing (July 23rd - immediately after the rights offering), the turmoil the company has been facing, the private registration, and the fact that it was registered by a hosting company with offices in Singapore/Hong Kong, there is a chance that the company did register the website in preparation for a possible bankruptcy filing in the future. As recent catalysts for the public debt and equity (new bridge financing and the rights offering) have already occurred, we believe Noble equity and credit have significant asymmetric risk to the downside in the next month on the possibility that Noble is forced to mark its forward coal curve to market by either Ernst and Young or the Singapore regulator, effectively rendering the company insolvent.
Update: August 10th
We have discovered new information which leads us to believe that this site may not be associated with the Noble Group and recommend exiting the equity short into earnings - the stock is down ~12% since our article. However, we remain bearish on the company, in fact Noble recently asked lenders for a waiver on the leverage covenant for loans issued only 3 months ago.
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