(Note: Noble claims to control about 10% of all soybean exports from Latin America, where it also says it owns at least 25,000 hectares of farmland devoted to oilseed and grain production.)
SINGAPORE - CHINA Investment Corp, a US$200 billion (S$283 billion) sovereign wealth fund, has bought a 14.5 per cent stake in trading firm Noble Group for US$850 million, giving China greater exposure to global commodities and trading expertise.
EYE ON AGRICULTURE
FOUNDED by Mr Elman in 1987 with US$100,000 in savings, Hong Kong-based Noble has expanded into a global empire that includes operations from sugar and ethanol in Brazil, soy crushing facilities in China and coal mines in Australia.
'The newly issued shares will provide the Noble Group with additional capital to pursue strategic investments in key agricultural markets globally,' Noble said in the statement.
The deal follows a cooperation pact between CIC and commodity trader Glencore, as China pursues resource firms to give it leverage in opaque global markets and access to the raw materials needed to feed its economy.
'A lot of sovereign wealth funds or state-linked firms are increasingly showing interest in resources, so this is in line with the trend,' said analyst Lee Wen Ching of OCBC Securities in Singapore. 'Noble provides access to a diversified portfolio.'
Noble, with interests from Brazilian sugar to Australian coal, is the only major global commodity trading house with a public listing, compared to privately-held but bigger rivals such as Glencore, in which sources have said CIC has concluded a cooperation agreement.
CIC's small, direct stake in Noble means the wealth fund is likely to play a hands-off role in running the business, while maintaining a role as financial investor. But the pact with Glencore will help CIC get more deeply into commodities trading, industry experts and analysts say.
For Noble, which agreed to sell 573 million shares at S$2.1137 each, or an 8 per cent discount to its last traded share price of S$2.30, the deal could mean firepower for acquisitions.
'The discount is not steep - the placement will definitely strengthen Noble's capitalisation,' said Mr Lee, who rates Noble a 'buy' with a S$2.50 target price.
'Some of it could also be used for acquisitions - there could be more distressed assets brought about by the financial crisis.'The placement consists of 438 million newly issued shares by Singapore-listed Noble and 135 million shares from trusts associated with the interests of Noble's founder and CEO Richard Elman, Noble said in a statement.