Noble creditors ink deal on restructuring

Deal includes new $786m trade finance and $131m hedging facility

Noble Group and a group of its senior creditors have signed an agreement on its proposed restructuring plan, the company said yesterday.

The agreement has been signed by creditors representing 46 per cent of existing senior claims.

Deutsche Bank, a senior creditor and future trade finance provider, has also signed the deal.

ING Bank, as a trade finance provider and fronting bank, is seeking credit approval to do the same. The two banks represent a further 4 per cent of existing senior claims.

The advisers to the group are in contact with creditors who hold a further 15 per cent of the existing senior claims and "have indicated their broad support" for the restructuring", Noble said in a Singapore Exchange (SGX) filing.

The deal, which will restructure senior claims and other unsecured liabilities, includes the provision of a new three-year committed US$600 million (S$786 million) trade finance and a US$100 million hedging facility. After restructuring, the group will be listed on SGX.

About 10 per cent of equity of the "new Noble" will be granted to current shareholders, while 10 per cent will go to management once the restructuring is complete. Management also has an option, exercisable in stages within five years, to acquire 10 per cent of equity from a company in which existing senior creditors will be allocated shares.

The "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 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 ... solidifying its position as the leading industrial and energy products supply chain manager in the Asia-Pacific region".

The restructuring is subject to regulatory and shareholder approval.

"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, perpetual capital securities holders will be given the offer to voluntarily exchange 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.

Securities Investors Association (Singapore) chief David Gerald said it welcomed the SGX call that Noble appoint an independent financial adviser in relation to its proposed restructuring. He added that chairman Paul 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 adviser.

A version of this article appeared in the print edition of The Straits Times on March 15, 2018, with the headline 'Noble creditors ink deal on restructuring'. Subscribe