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Noble Group flags $5 billion annual loss, races to strike debt deal

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Troubled commodities trader Noble Group warned of a massive annual loss, citing challenging operating conditions, but said it was making progress to clinch a $3.4 billion debt-for-equity swap to ensure its survival.

Noble announced a deal with creditors last month to halve its senior debt and give them 70 percent of the company, while existing equity holders would see their stake diluted to 10 percent.

This follows three crisis-wracked years in which Noble — once a global commodity trader with ambitions to rival the likes of Glencore and Vitol — cut hundreds of jobs, sold billions of dollars of assets, took hefty writedowns and changed its CEOs and chairman.

“Operating conditions continued to be challenging in 4Q 2017 as the group continued to manage the business within existing constraints in trade finance and liquidity availability,” Singapore-listed Noble said in a statement on Monday.

The Hong Kong-headquartered company expects a total net loss of $1.72 billion to $1.92 billion for the quarter ending December 2017, stemming largely from non-cash losses from its mark-to-market derivatives portfolio.

This will lead to a record annual loss of $4.78 billion to $4.98 billion, which follows a profit of $9 million in 2016 and a loss of $1.7 billion in 2015.

“Following a challenging 2017, we are looking forward to the final phase of our restructuring, and the creation of a new Noble as a focused and appropriately financed group set to capitalize on the high-growth Asian commodities sector,” said Paul Brough, a restructuring specialist who took over as Noble’s chairman last year.

Noble warned that the expected quarterly net loss would result in a negative net asset position for the group, but said the board “believes that the proposed restructuring, once implemented, should restore shareholders’ equity and create a sustainable capital structure…”

Noble also said a group of senior creditors with whom it was discussing its restructuring, called the “Ad Hoc Group”, held about 36 percent of the company’s senior bonds and loans.

The Ad Hoc Group’s advisers were in contact with creditors who held about an additional 15 percent of Noble’s senior debt instruments and had indicated their road support for a restructuring.

Founded in 1986 by Richard Elman, who rode a commodities bull run to build Noble into one of the world’s biggest traders, the company was plunged into crisis in February 2015 when Iceberg Research questioned its accounts. Noble has defended its accounts.

The company’s market value has fallen to just S$259 million($197 million) from the $6 billion it commanded in February 2015. Noble said the latest profit guidance and ranges were estimates and may change as it finalizes its annual results, which will be announced on February 28.

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Uber wins legal fight to regain London license

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A man holding up a smartphone with the Uber transport app visible on screen, while taxis queue in the background, on June 4, 2019. (Photo by Olly Curtis/Future via Getty Images)

Olly Curtis | Future | Getty Images

Uber won its legal fight to continue operating in London on Monday, as a judge overturned a ban on the ride-hailing app by the city’s transport regulator.

Last year, TfL stripped Uber of its license for a second time — it first declined to renew Uber’s London license in 2017 — citing a “pattern of failures” that had put passengers at risk.

The watchdog said a glitch in Uber’s systems allowed unauthorized drivers to upload their photos to other driver accounts and fraudulently pick up passengers in at least 14,000 journeys.

Uber had tried to allay the regulator’s passenger safety concerns, introducing a new system in April to verify drivers’ identities through a mix of facial recognition and human reviewers.

London is Uber’s largest market by far in Europe. The company has racked up around 3.5 million users and 45,000 drivers in the U.K. capital since launching there in 2012.

It’s the city’s top ride-hailing player but faces heavy competition from several new operators including India’s Ola and Estonia’s Bolt.

This is a breaking news story. Please check back for updates.

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Dow futures up 200 points following a 4-week losing streak

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Stock futures climbed in early morning trading on Monday following a four-week losing streak on Wall Street.

Futures on the Dow Jones Industrial Average rose 213 points. S&P 500 futures and the Nasdaq 100 futures also traded in positive territory as well.

The S&P 500 and the 30-stock Dow were coming off their fourth straight negative week, shedding 0.6% and 1.8%, respectively. It marked the first time since August 2019 that the two benchmarks suffered a four-week losing streak.

The tech-heavy Nasdaq eked out a 1% gain last week, posting its first positive week in four as the technology sector rebounded slightly from the recent deep rout. 

Signs of a worsening pandemic continue to keep investors on edge. New daily coronavirus cases topped 1,000 in New York state on Saturday, marking the first time the state’s new infections have broken the 1,000 threshold since early June.

Major averages are on track to post steep losses for September, a historically weak month for stocks. The Dow and the S&P 500 have fallen 4.4% and 5.8%, respectively, while the Nasdaq has dropped 7.3%. The declines followed a massive comeback from the coronavirus sell-off that saw the S&P 500 climb more than 50% from its March bottom.

“When markets get to the kinds of extremes we saw a month ago, it tends to take a very deep correction before the worst is behind us,” Matthew Maley, chief market strategist at Miller Tabak, said in a note on Sunday. “It also usually sees several ‘waves’ of a decline.” 

Investors continue to monitor the developments on further fiscal stimulus after negotiations between House Democrats and the Trump administration fell apart in early August.

House Speaker Nancy Pelosi said Sunday a last-minute coronavirus aid deal remains on the table as House Democrats try to forge ahead on a smaller aid package costing about $2.4 trillion. The chamber could vote on the bill as soon as next week.

Meanwhile on Saturday, President Donald Trump announced that he will nominate Judge Amy Coney Barrett to fill the vacancy left by the death of Justice Ruth Bader Ginsburg on the Supreme Court.

The move sets up a confirmation fight just weeks before Election Day. Hearings to consider Trump’s nominee are set to begin Oct. 12, Senator Lindsey Graham said late Saturday.

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K-pop sensation BTS’ label prices IPO at top end of range

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South Korean boy band BTS backstage during the 61st Annual GRAMMY Awards at Staples Center on February 10, 2019 in Los Angeles, California.

John Shearer | Getty Images Entertainment | Getty Images

SINGAPORE — Shares of Big Hit Entertainment, the music label behind global K-pop phenomenon BTS, were priced on Monday at the top end of the range ahead of their highly anticipated market debut.

Big Hit Entertainment’s stock price was set at 135,000 South Korean won (approx. $115) per piece, according to a regulatory filing on Monday. That was at the top end of the 105,000-135,000 won per share range which was earlier announced. Big Hit is expected to make its market debut in October.

According to the regulatory filing, Big Hit will also raise 962.55 billion Korean won (approx. $820 million) through the offering. The stock was 1,117 times oversubscribed by institutional investors, the filing showed.

Entertainment stocks in South Korea popped on the back of the IPO pricing announcement by Big Hit. Shares of YG Entertainment were up nearly 10%, JYP Entertainment were higher by 8.36% and SM Entertainment jumped more than 6%.

A recent Reuters report indicated that retail investor interest for Big Hit’s IPO is expected to be strong, with fans of BTS reportedly looking to secure shares of the label.

Reuters also said demand among South Korean retail investors for new share listings has been strong as markets are filled with cash after government stimulus efforts to prop the coronavirus-hit economy.

Earlier in September, South Korean video game publisher Kakao Games saw a blockbuster market debut, and shares surged by the daily permissible limit of 30% on their first trading day.

— CNBC’s Chery Kang contributed to this report.

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