HONG KONG/SINGAPORE, May 22 (Reuters) - China’s state-owned Sinochem is no longer pursuing an investment in Noble Group Ltd due to concerns over the finances and business outlook of the loss-making commodity trader, three sources familiar with the matter told Reuters.
When it held talks with Noble earlier this year to buy a stake, Sinochem’s thinking, sources have told Reuters, was that a deal could help the oil, gas and petrochemicals producer to become a globally active energy trader.
But Sinochem has become cautious about linking up with Noble after the trader posted a shock quarterly loss this month, sparking a rout of its shares and bonds and triggering cuts in outlooks by rating agencies, sources said.
Noble has been wracked in the past two years by a steep downturn in commodities prices, management overhauls and allegations of improper accounting, which the company has steadfastly rejected.
The recent turmoil triggered fresh concerns at Sinochem about Noble’s performance and ability to repay debt, the sources said.
Sinochem, which has not confirmed its interest so far in a Noble stake, did not immediately respond to a request for comment.
An external spokeswoman for Noble declined to comment and referred Reuters to the company’s statement on Feb. 14 when Noble had said it was in discussions regarding a possible strategic investment in the company but no binding arrangement had been entered into.
The sources declined to be identified due to the sensitivity of the matter. ($1 = 1.3870 Singapore dollars) (Reporting by Sumeet Chatterjee and Anshuman Daga; Additional reporting by Meng Meng in BEIJING; Editing by Muralikumar Anantharaman)