I feel that Noble is facing some difficulty in liquidity - shrinking liquidity headroom and constrained credit line. Banks are trying to lower their exposure to Noble without killing it for now, whose business model depends significantly on revolving credit facilities to finance their working capital cycle. The reduction in the revolving credit facility is significant.
They even have to get a covenant waived. That's why they did the rights issue and are selling off assets. With constrained liquidity, they are forced to scale down their businesses to reduce the working capital requirement rather than what was implied that they made a choice to sacrifice profit for cash. Despite the fall in revenue, Noble still suffers a negative OCF of USD 534 mn in 1H2016 - Off-balance sheet receivables of $200mn that came on-balance sheet.
http://www.thisisnoble.com/images/storie...AFinal.pdf
"Liquidity headroom, being the sum of readily available cash and unutilized committed facilities, was at US$0.8 billion as at 30 June 2016 compared to US$1.9 billion as at 31 March 2016. The decrease in Q2 2016 was primarily due to the reduced size of the new Revolving Credit Facility refinanced in May 2016 compared to the maturing Revolving Credit Facilities."
"In Q2 2016, the increase was primarily due to a net increase in trade receivables, as approximately US$200 million of previously off balance sheet trade receivables in the US came on balance sheet to form part of the asset base in the US borrowing base facility, which closed in May 2016. The remaining changes in working capital were due to fluctuations in commodity prices and the timing of settlement of physical commodity contracts."
http://www.businesstimes.com.sg/companie...after-loss
"Net debt increased to US$3.92 billion by June 30 from US$3.69 billion three months earlier, the company said. Liquidity headroom - its accessible cash plus available committed bank facilities - shrank to US$800 million from US$1.9 billion at the end of the previous quarter. That number needs to be "much higher", according to chief financial officer Paul Jackaman.
"There's been an increased focus on liquidity over profitability," Mr Jackaman said on a conference call after the results.
"It's fair to say that we have accelerated, being very single minded, on moving as fast as we can to continue to deleverage and that has had consequences on results."
Credit Lines
Some credit lines linked to particular commodities, are "constrained", Mr Jackaman said in an interview after the call. The company got a waiver from relevant banks relating to one of the financial covenants in its revolving credit facility and borrowing base facility for the period ended June 30, it said."