* Former long-serving Noble executive sets up rival firm
* 10-20 former Noble colleagues join Banga at Caravel-sources
* Caravel to focus on shipping mineral commodities
* Banga says sons to join him in new venture
By Keith Wallis
SINGAPORE, Oct 30 (Reuters) - Harindarpal "Harry" Banga, a billionaire businessman who carved out a 20-year career at commodities trader Noble, plans a return to the industry in a new trading firm with his two sons.
The 63-year-old former sea captain has amassed a $1 billion war chest to splurge on the newly formed Caravel Group while luring 10 to 20 former Noble Group Ltd colleagues to join the venture, sources said. They include former Noble staff in Hong Kong and at its iron ore business in Beijing.
The move will put Banga - once described as "the heart and soul of Noble" by company founder Richard Elman - in competition with his former employer, which reported operating income of $624 million in the first half of 2013.
Banga was Noble's vice chairman emeritus until he stepped down as a non-executive director in April 2013 and he still holds about $116 million worth of shares. He sold 225 million Noble shares in November 2012 for S$248 million ($202 million).
Banga will formally launch Hong Kong-based Caravel on Friday. The firm - named after a 15th and 16th century Portuguese exploration and trading vessel - has already set up its headquarters, including trading desks, in a swish building in Hong Kong's Wan Chai district, less than 500 metres from Noble's offices.
Caravel will rate as "a very sizeable company. It's not kid's stuff, it's the real deal," said Martin Rowe, managing director of shipping services and shipbroking firm Clarksons Asia.
Indian-born Banga joined Noble in 1989 to head up its ship chartering division two years after the company was founded in Hong Kong by Elman, a former scrap metal man in Britain. The firm specialised in ores, steel products, coal and coke, before listing in Singapore in 1997 and expanding into grains and physical assets such as mines and farms.
Banga, well respected in shipping circles for his business savvy, told Reuters that Caravel will trade commodities and related derivatives, and will also be active in shipping, asset management and private equity investment.
But Caravel would not follow Noble into agribusinesses or investing in commodities assets, Banga said. This is a target growth area for Noble, which has invested in facilities such as oilseed processing plants in China and sugar mills in Brazil.
"It will be like the old Noble used to be," Banga said in a phone interview. Caravel will concentrate on trading and shipping commodities such as iron ore, thermal and coking coal, nickel ore and manganese, mainly in the Asia Pacific, he said.
Elman declined to comment on Caravel or Noble's business.
Banga said he formed the new firm because his two sons, Guneet and Angad, "didn't want to join Noble".
Guneet was a management trainee at Noble in 2006-07 before joining first Citigroup and then investment fund Lexdale International. Angad worked for GSO Capital Partners LP, the former Blackstone Group credit hedge fund group.
Some 10 to 20 Noble staff are joining Caravel, sources close to both companies said. The exact number was unclear as some Noble staff were waiting for non-compete clauses to expire, one source said.
"A lot of friends and colleagues from Noble have moved with me," Banga said.
They include Henrietta Lee and Anaurag Bhatnagar, former co-heads of Noble's iron ore business, who are working at the Caravel office. Neither was available for comment.
Kerry Deal, a former derivatives broker at Clarkson Asia and Jefferies Bache, joined Caravel about a month ago to head up the firm's freight derivatives business including iron ore swaps.
Caravel is in the final stages of negotiating shipbuilding contracts for its first six ships, which should be confirmed in the next month, Banga said.
The vessels, which will be used to carry Caravel's commodity cargoes, will be delivered in 2015 and 2016.
Caravel was also looking at new and secondhand ships as well as chartering ships from other owners. These are expected to be large Capesize dry bulk ships which mainly haul iron ore and smaller Panamax vessels used to carry coal and iron ore.
It was "too early" to estimate how large Caravel's owned and chartered fleet would become, Banga said.
Banga bought Fleet Management, a company specialising in day-to-day shipboard operations, for $75 million from Noble in March 2011. Fleet, which manages around 300 vessels for third party owners and is supervising construction of 28 another ships, is expected to manage the Caravel vessels.
Clarksons' Rowe said he expected Caravel would soon take ships on long-term time charter, and would be an aggressive competitor for established firms.
"We are following them like a hawk. All the indications are they are going to make a big splash," Rowe said. "I don't think they are going to be shy." (Editing by Richard Pullin)