Thoughts on Noble rights issue - Update

As the mother share is now trading at $0.19......the nil paid rights, Noble R is trading at $0.08.

For those existing shareholders who have a positive outlook on this company, one option is to buy the nil paid rights at this level to average down your cost.

Back to my example earlier, assuming:
- you bought 1,000 Noble R today at $0.08.....
- subscribe to your full entitlement of new shares @ $0.11 including the nil paid bought
- your average investment cost would translate to $0.23 vs current trading price at $0.19.....

This is just a mathematical exercise. What is key is your outlook on the company.

What is certain is that the company would be able to raise US$500m from this rights issue since the rights issue is fully subscribed. Key is the development of the sale of its energy business which it last updated at a fair value of US$1.25b. ".....The company began the sale process for US-based electricity supplier NAES on May 30, 2016 ....... In August 2015, Noble indicated the value of the business at more than US$1.25 billion." If the sale happen and at close to its fair value, then I think it has enough liquidity to tide over this period and hopefully a positive review from the rating agencies.

As at now, I am vested through the purchase of the nil paid rights at current level.