Under-probe Noble Group extends restructuring deadline to Dec 11

The extension of a key waiver to allow the deadline to be pushed back is necessary for the deal to go ahead without creditors being forced to make a buyout offer for its shares.
The extension of a key waiver to allow the deadline to be pushed back is necessary for the deal to go ahead without creditors being forced to make a buyout offer for its shares.PHOTO: REUTERS

HONG KONG (BLOOMBERG) - Noble Group extended the deadline for its marathon restructuring to Dec 11 to address regulators' concerns, a week after Singapore authorities began an investigation into the embattled commodity trader's finances.

The company on Sunday (Nov 25) moved the deadline for the US$3.5 billion (S$4.8 billion) debt restructuring back by two weeks. Noble said that Singapore's Securities Industry Council extended a key waiver to allow the deadline to be pushed back. That will be taken as a positive sign by investors, suggesting that the Singapore authorities are not intent on preventing the restructuring from taking place.

The waiver is necessary for the deal to go ahead without creditors, who will control the company, being forced to make a buyout offer for its shares.

The restructuring was thrown into crisis after the Singapore authorities announced a wide-ranging investigation of the company's accounting the week before the debt revamp was due to be completed. Noble has been dogged for years by claims that its accounts have been unreliable, especially in relation to the valuation of gains on some long-term contracts. Those accusations have routinely been denied by the trader.

The authorities said last Tuesday that they are investigating suspected false and misleading statements and breaches of disclosure requirements, as well as potential non-compliance with accounting standards by Noble Resources International.

The delay was necessary "due to the additional time required to fully address all concerns of the regulators and to ensure that the interests of all stakeholders continue to be protected," the company said in a statement on Sunday. Noble "is continuing to fully and constructively cooperate with the authorities in their investigation".

It said it is also appointing experts to assist in responding to the technical accounting issues raised by the Accounting and Corporate Regulatory Authority (Acra).

In a separate statement, the authorities said they had been working since 2015 to gather and review information to establish a basis to probe deeper into the case. It was the review of information relating to write-downs announced in late 2017 and 2018 as well as other information that provided the basis for the authorities to commence overt investigations into potential breaches of law.

The probe is being conducted by the Commercial Affairs Department of the Singapore Police Force; the Monetary Authority of Singapore, the country's de facto central bank; and Acra.

The once US$12 billion company has lost billions in value since Iceberg Research, run by a former Noble senior credit analyst named Arnaud Vagner, published a report in 2015 claiming that the trading house's long-term contracts were probably overvalued. The company has been reduced to a rump by untenable debt and write-downs.