SINGAPORE - Noble Group Limited said its board of directors believe the proposed restructuring will result in a "fair and equitable treatment of all shareholders".
It is referring to the restructuring support agreement (RSA), whose "primary restructuring" proposal requires a simple majority of the existing shareholders.
Under the RSA, if shareholders do not approval this primary restructuring, the "alternative restructuring" on a prepackaged basis involves the sale of target assets to a new Noble entity and the issuance of shares in the new entity to shareholders who voted in favour of the primary restructuring.
"The senior creditors are the economic owners of the company. It follows that the provision of equity in New Noble to shareholders is at the full discretion of senior creditors," Noble said on Monday morning (March 26) in response to queries from the Singapore Exchange.
"The RSA provision allowing consenting shareholders to receive at least the same proportion of equity in New Noble under the alternative restructuring is, to the board's knowledge, unprecedented when viewed against comparable restructurings where the value of the target company's assets are, in a liquidation scenario, materially lower than its debts," it added.
Explaining why it will move to the UK to implement the "alternative restructuring", Noble said the company is incorporated in Bermuda and its financial debts are governed by English and New York law.
On the basis of legal advice it has received, and taking into account the views of the ad-hoc group of creditors, the Board concluded that implementing the "alternative restructuring via an administration order in the UK is preferable to other alternative procedures and jurisdictions for reasons of cost, process duration and certainty of outcomes.
If the primary restructuring is not approved by Noble shareholders, the "alternative restructuring" will likely be implemented as a means to seeking liquidation.
"The RSA that the Board has negotiated with the company's senior creditors represents a key milestone in the company's strategic review process and puts in place the foundations for a restructuring that will preserve the business of the group as a going concern and maximise as much value as possible for all of the company's stakeholders," Noble said.
The Hong Kong-based commodities trader has been hit with a slew of lawsuits from Indonesian coal miner PT Atlas Resources, who is seeking compensation and cancellation of marketing deals with Noble and one of its units, as well as from major shareholder Goldilocks Investment, which is accusing Noble of inflating profits to raise money.
Goldilocks has hit out at a clause under the "alternative restructuring", which entitles shareholders who vote in favour of the "primary restructuring" shares in the new Noble but not those do not vote in favour, coining it as "unfair".