Noble Group to sell North American energy distribution unit to Calpine Corp for $1.05 bn

Hong Kong-based commodities trader Noble Group yesterday struck a deal to sell its North American energy distribution unit to Texas-based power generator Calpine Corp for $1.05 billion, as part of its restructuring to reduce debt.

Calpine, the largest generator of electricity from natural gas and geothermal resources in the US, will buy Noble Americas Energy Solutions (NAES) for $800 million plus an estimated $100 million of net working capital.

The sale ''substantially completes the $2 billion capital raising initiative that we announced in June,'' said Noble's co-CEO's, Jeff Frase and Will Randall. ''With this divestiture, Noble will continue to reduce debt while also funding growth opportunities in our high return businesses,'' they said.

San Diego-based NAES currently serves commercial and industrial customers in 18 states nationwide, including California, Texas, the Mid-Atlantic and the Northeastern US, ''In addition to expanding our retail customer sales channels and product offerings, we will more than double the volume of retail load we are capable of serving across the country from our complementary wholesale power generation fleet.

The sale comes as the Singapore Stock Exchange-listed trader is trying to rebuild its image that had taken a beating when a little known outfit Iceberg Research accused it of accounting fraud in 2015 and claimed it was going to be the next Enron, which led to a collapse of its share price and credit ratings.

Early this year, it sold its 49-per cent stake in its agricultural trading and processing joint venture Noble Agri to Chinese grain trader COFCO for $750 million.

Noble Agri is a joint venture between Noble Group and a consortium comprising of COFCO Corp., HOPU Investment and other international financial investors.