SINGAPORE (June 27): Noble Group shares slid Tuesday on the first day of trading after Fitch Ratings cut the embattled commodities trader’s credit rating to a score indicating that a default is possible.

The company’s stock dropped 2.8% as of 3.04pm in Singapore after a public holiday Monday. It earlier fell as much as 7.6%. Fitch slashed its rating late Friday by two steps to CCC, its third downgrade since the middle of last month. Fitch’s definition for that rating says it indicates "substantial credit risk" and that "default is a real possibility”.

The moves mark a reversal following a 63% surge in Noble Group’s shares last week, when the company said it remains in talks with potential investors after agreeing with lenders to extend its US$2 billion ($2.8 billion) credit facility for four months. The struggle to sustain the rally flags challenges for the company, in which Abu Dhabi fund Goldilocks Investment Co. became a major holder last week, as it searches for a strategic investor to restore confidence following a collapse in its shares and bonds this year.

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