Commodity trader Noble reaches agreement to reduce debt

HONG KONG • Hong Kong-based Noble Group Holdings said yesterday that it had reached an agreement with some of its creditors to significantly reduce debt as part of a restructuring that it hopes will bolster its commodities trading business.

Its predecessor, Noble Group, once Singapore-listed and Asia's biggest commodity trader, saw its market value all but wiped out from US$6 billion (S$8.2 billion) in February 2015 after Iceberg Research issued reports accusing it of inflating its assets' values.

Noble Group, which is undergoing a winding-up process, sold billions of dollars of assets, took hefty write-downs and cut hundreds of jobs.

In 2018, it was delisted from the Singapore Exchange. Noble Group Holdings was created in late 2018 as part of that debt-for-equity restructuring process. It operates on a smaller scale as an energy products and industrial raw materials supply chain manager.

Under its restructuring plan, a group of holders of company bonds due in 2023, worth US$661 million in principal and interest, will exchange the tranche with new notes worth US$350 million and will also get at least a 97.5 per cent stake in a new holding company.

The plan also requires holders of bonds worth US$344 million and due in 2025 to exchange their notes for up to 2.5 per cent of the shares of the new holding company, with the right to acquire more, a company statement said.

The exercise is expected to be completed by March next year, it said, adding that the trading company's trade finance funding has also been increased from US$350 million to US$450 million to help boost its operations.

"From a fundamental balance sheet perspective, this is a comprehensive transaction to get us the capital structure that we believe is a sustainable one for the very long term," said Noble Group Holdings executive chairman Matt Hinds.

REUTERS