SINGAPORE - Noble Group and the ad hoc group consisting of senior creditors that support its restructuring proposal, are now in the process of selecting new board members, financial adviser to the ad hoc group, Houlihan Lokey EMEA LLP said on Thursday (April 26).
The new board will include a chairman, and four or more independent non-executive directors. Global executive search firm Spencer Stuart has been retained to conduct the search.
Noble engaged with the ad hoc group in October last year. Since then, the ad hoc group has been working with the company and are "confident that Will Randall and his management team have the skills, experience and relationships necessary to drive the businesses forward", Houlihan Lokey said in a letter to the firm. Mr Randall is Noble's CEO and executive director.
To retain the team during the restructuring period and incentivise them to rebuild the business going forward, the ad hoc group has developed certain incentive arrangements.
Under the new compensation structure, employees will be paid through a combination of equity and cash bonuses based on cash profits generated from the restructured business, or New Noble's operations.'
"This will appropriately incentivise management to focus on profitable businesses and markets, while taking into account a finance charge for the capital employed in the business," global investment bank Houlihan Lokey said.
It is also proposed that "management will receive equity in the restructured business to ensure they are partners in the business, and appropriately incentivised to continue creating value for all stakeholders going forward. This is standard and typical in restructuring situations, particularly where maintaining management stability is critical," Houlihan Lokey added.
Looking ahead, the plan is for New Noble to focus on providing service in its key market segments (energy coal, met coke, carbon steel materials, LNG and aluminium) where it has historically been the most profitable.
It is intended that growth initiatives will be "tightly controlled by the new board", with an eye to balance the need for future growth, ensuring that the focus is on "profitably returning to historical trading volumes as soon as practicable", the investment bank said.