March 22, 2018 / 2:28 AM / a year ago

Noble Group sees debt restructuring as only option for bondholders

SINGAPORE (Reuters) - Noble Group Ltd (NOBG.SI) said more creditors backed its debt restructuring agreement, making it difficult for those who opposed the deal to try and wind up the company, after it defaulted on a $394 million bond that matured this week.

FILE PHOTO: The company logo of Noble Group is seen at its headquarters in Hong Kong March 23, 2015. REUTERS/Bobby Yip/File Photo

The Singapore-listed commodity trader is seeking a $3.4 billion debt restructuring seen as critical for the beleaguered firm’s survival. But the deal has been opposed by some bondholders and shareholders, including Goldilocks Investment Co, which has an 8.1 percent stake in the firm.

Noble said the 2018 noteholders who have not signed the restructuring support agreement (RSA) can to try to take action against the company. However, the board has been advised that it would be very difficult to successfully wind up the company, the only realistic remedy available to such holders.

Creditors who have signed or acceded to the RSA constitute about 50 percent of claims against the company in respect of its 2018 notes, 2020 notes, 2022 notes and revolving credit facility, Noble said, adding that it expects more lenders to back the restructuring.

Goldilocks filed a lawsuit with a Singapore court against the commodities trader and some of its former and current senior executives, alleging they inflated Noble’s assets.

Noble said it plans to resist any and all allegations or claims made against it.

Goldilocks said it would consider working on an improved debt restructuring plan.

“Goldilocks has been approached by other stakeholders, and is open to working with all who share in the common purpose of negotiating a fair and re-modelled restructuring plan that restores and preserves value for all parties involved,” it said on Thursday.

Noble had said previously said that it would not make the redemption payment on the maturing bonds.

Once Asia’s largest commodity trader, Noble was plunged into crisis in February 2015 when Iceberg Research questioned its books. Noble has stood by its accounting.

Hong Kong-headquartered Noble has been negotiating a debt-for-equity swap for months after selling billions of dollars of assets, reporting big losses due to a severe commodities downturn, and cutting hundreds of jobs over the past three years.

Under the deal, Noble is seeking to halve its senior debt and hand over 70 percent of the restructured business to creditors.

Noble’s market value has fallen to just $114 million, from $6 billion in February 2015, as the company reported record losses and shrunk its business.

Shares of the company were down 4.8 percent at S$0.099 on Thursday afternoon.

(This story has been refiled to drop extraneous word in first paragraph)

Reporting by Aradhana Aravindan and Miyoung Kim; Editing by Shri Navaratnam

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