SINGAPORE - Noble Group and a group of senior creditors have signed an agreement on its proposed restructuring plan, the company said in a filing with the Singapore Exchange on Wednesday morning (March 14).
The restructuring support agreement (RSA) has been signed by the ad-hoc group of creditors, which represents 46 per cent of existing senior claims. Deutsche Bank AG, an existing senior creditor and future trade finance provider, has also signed the RSA, while ING Bank, as an existing trade finance provider and fronting bank, is in the process of seeking credit approval to do the same. The two banks represent a further 4 per cent of existing senior claims.
The advisers to the ad-hoc group are in contact with creditors who hold a further 15 per cent of the group's existing senior claims and "have indicated their broad support for the proposed financial restructuring", Noble said.
The RSA, which will see the restructuring of the existing senior claims and other unsecured liabilities, includes the provision of a new three-year committed US$600 million trade finance and a US$100 million hedging facility.
The group, post-restructuring, will be listed on the Singapore Exchange. Some 10 per cent of equity of the "new Noble" will be granted to current shareholders, while 10 per cent will also be given to the management once the restructuring is complete. The management also has an option, exercisable in stages within a five-year period, to acquire 10 per cent of equity from a company in which existing senior creditors will be allocated shares (Senior Creditor SPV).
As a performance incentive, "new Noble" will grant management a one-off performance incentive share option to subscribe for a further 5 per cent of new common equity in the company, exercisable within a five-year period.
Noble said: "The proposed financial restructuring will provide the group with a sustainable capital structure to deliver long-term value for all of its stakeholders, as the group focuses on its hard commodities, freight and LNG businesses and in solidifying its position as the leading industrial and energy products supply chain manager in the Asia-Pacific region."
The proposed restructuring is subject to regulatory and shareholder approval, and could involve the implementation via one or more schemes of arrangement.
"In support of the proposed financial restructuring, the board has agreed to commence the process to move the company's centre of main interests from Hong Kong to the United Kingdom," Noble added.
Meanwhile, existing perpetual capital securities holders will be given the offer to voluntarily exchange existing perpetual capital securities into a new US$25 million, 2.5 per cent non-accumulative pay-if-you-can perpetual capital security instrument issued by the new company.
Paul Brough, chairman of the group, said: "This RSA sets out a clear pathway to providing the group with a sustainable capital structure and a strong foundation from which to deliver long-term value for all its stakeholders."
Meanwhile, in a statement on Wednesday afternoon, the Securities Investors Association Singapore (SIAS) chief David Gerald said that the association welcomed the recent Notice of Compliance by SGX requiring Noble to appoint an independent financial advisor (IFA) in relation to its proposed restructuring plan.
He said: "Independence of the IFA is paramount, for this review to be credible and fair to all stakeholders. In particular, focus must be placed on appropriateness and extent of the scope to adapt to Singapore requirements and to address minority shareholder protection."
He went on to say that Mr Brough, chairman emeritus Richard Elman and chief executive Will Randall - who all received "questionable remuneration packages in FY17, despite Noble reporting exceptional losses" - are non-independent executive directors and should not be involved in the appointment or workings of the IFA.
He added: "Shareholders and noteholders are of the view that management, who had been instrumental for Noble's huge losses, should not be beneficiaries of the restructuring, at the expense of other minority stakeholders, including shareholders and perps. SIAS expects Noble's board to do the right thing."