Noble Group suspended its shares yesterday pending an announcement, as efforts to get shareholder agreement on its controversial US$3.5 billion (S$4.7 billion) debt restructuring plan drag on longer than expected.
The stock fell to a record low of five cents last week before closing at 5.4 cents on Thursday prior to a public holiday. Once Asia's largest commodity trader, Noble has seen its market value shrink to about US$50 million from more than US$10 billion in 2010.
After three years of decline featuring billions of dollars in losses, a debt default, lawsuits and, more recently, public sparring with shareholder Goldilocks Investment, the trader is struggling to secure a rescue deal that will swap half the debt for equity and hand control to creditors. The company's original plan was to complete the restructuring by mid-to late July.
Meanwhile, Pinpoint Asset Management and Value Partners have filed a claim against Noble Group in a British court, according to a search of cases. While there were no details on what the claim involves, Pinpoint is part of a group of perpetual bond holders that have objected to the restructuring plan. Noble Group was said last month to be close to a deal with the group.
Under the terms of a revised restructuring deal in March, the perpetual bond holders would have been offered an exchange of their existing securities with a face value of US$400 million for US$25 million of new perpetual bonds. Noble's initial plan in January had offered the perpetuals US$15 million.
The perpetual bonds were down 2.3 cents to 7.3 cents on the dollar in Singapore yesterday, and set for the biggest one-day decline since January. The trader's defaulted 2018 notes climbed 0.4 cent to 39.6 cents on the dollar, recouping part of the 2.7 cent drop last Friday.
"Looking at the market reaction on the perps, there might have been disruptions to the discussions between Noble and its perpetual bond holders," said senior analyst Ang Chung Yuh at iFast Corp.
While the restructuring plan has been backed by some 85 per cent of senior creditors, as well as founder and largest shareholder Richard Elman, it has run into fierce opposition from Goldilocks.
The Abu Dhabi-based investment fund has sued the trader, as well as the banks and hedge funds supporting the proposal, to halt the deal.
To get the rescue over the line, Noble chairman Paul Brough needs approval from shareholders as well as creditors. The company is working on a circular to send to stock holders, before a special general meeting yet to be scheduled.
Mr Brough has said that if shareholders do not approve the plan, the company would opt for a pre-packaged administration in Britain to implement the restructuring.
Noble has hired Provenance Capital as an independent adviser to assess whether the proposed restructuring is fair, complying with a request from the Singapore regulator after the deal ran into opposition.