Noble Group has hit a roadblock in its push to complete its debt restructure after the High Court yesterday allowed a legal bid by its third-largest investor to stop Monday's annual general meeting (AGM).
Goldilocks Investment Company welcomed the court decision, saying it was "heartened that shareholders' rights which Goldilocks has fought for have not been curtailed".
It also called on shareholders not to vote for the firm's nominated directors as they will move the centre of main interest to Britain as part of an alternative restructuring plan Noble has outlined.
Noble's planned AGM would have included an election of nominated directors. But the restructuring support agreement that Goldilocks has opposed even though most creditors have backed it would have been put to a vote in a separate shareholder meeting.
Goldilocks launched two lawsuits on Wednesday after its notice to nominate five directors was rejected by Noble based on invalid paperwork. The first sought a ruling that Goldilocks can propose directors for election to Noble's board, and included the injunction to stop the AGM; the other was to restrain Noble from taking any other action on the restructuring agreement.
The financial adviser to Noble's ad hoc group of creditors, Houlihan Lokey EMEA LLP, said on Thursday night that Noble and the ad hoc group are selecting new board members. They will include a chairman, and four or more independent non-executive directors.
Houlihan Lokey also said that employees of New Noble will be compensated through a mix of equity and cash bonuses based on cash profits generated from operations.
And it noted that management receiving equity in the restructured business is "standard and typical in restructuring situation, particularly where maintaining management stability is critical".
The plan is for New Noble to focus on providing services in its key market segments - energy coal, met coke, carbon steel materials, LNG and aluminium.
Corporate governance advocate Mak Yuen Teen said the additional disclosure by Houlihan Lokey helps address some concerns. "On the compensation structure and management equity, it's saying the right things about mix of cash and equity, incorporating a capital charge, vesting conditions and so on but the specific details are very important.
"Noble seems to fail to communicate these properly."
Questions remain on whether Noble has a sustainable future and the accountability of those who have contributed to the massive destruction of shareholder value, he added.
Noble shares last traded at 8.7 cents, up 2.4 per cent yesterday, before the firm called for a trading halt at 2pm.
