Noble Group to dispose 51% stake in Noble Agri Limited

COFCO to make initial $1.5b payment.

Noble Group Limited has entered into a share sale agreement with COFCO (Hong Kong) Limited to dispose 51% stake in Noble Agri Limited (NAL), reports OCBC Investment Research, which upon completion, COFCO will make an initial payment of US$1.5b.

The closing amount will be adjusted after completion so that the final consideration is equal to 1.15x of 51% of the audited book value of NAL Group for FY14.

As of end FY13, the audited book value of NAL Group was ~US$2.8b and net debt was ~US$2.5b. However, the deal is subject to several conditions with a long stop date of 31 Dec 2014 (unless mutually extended or terminated).

OCBC Investment Research said that according to Noble, the excess over book value is US$47.6m; the estimated gain on disposal is ~US$64.8m.