SINGAPORE - Embattled commodities trader Noble Group has failed to pay the coupon on US$750 million notes due March 9, 2022.
Noble said that it has availed itself of a 30-day grace period and has "consulted extensively" with an ad hoc group of the group's senior creditors. It also took into consideration advice received from the group's legal and financial advisors.
"The board currently considers that the company is very close to reaching final terms with the ad hoc group in respect of a proposed restructuring of the group's unsecured liabilities," it said in a filing to the Singapore Exchange on Monday morning (March 12).
In a separate announcement earlier on Monday, Noble said that it, and its indirect wholly-owned subsidiary Core Integrity, has entered into a memorandum of agreement with Bianca Corporation and Primerose Shipping Co to sell a Kamsarmax dry bulk carrier vessel for US$24 million.
Built in 2015, the vessel, Ocean Integrity, is registered in Hong Kong and has a capacity of 81,499 deadweight tonnage. The vessel is employed to service external customers as well as Noble Group's internal freight requirements.
As at 31 Dec 2017, the book value of the vessel was approximately US$23.5 million. As such, the gain on disposal would be about US$0.5 million.
Two valuations of the vessels were recently commissioned by Noble Group on Feb 1. The first one was conducted by Arrow Valuations, and the second by Clarkson Valuations; both valued the vessel at US$24 million.
The net loss (before income tax, minority interests and extraordinary items) attributable to the vessel, based on the Noble's FY2017 results, is approximately US$2 million, the group said in a filing to the Singapore Exchange early Monday morning.
"Noble Group has decided to avail itself of favourable market conditions to monetise the vessel," the group said. "The proposed disposal will not significantly impact the operations of Noble Group's freight business."
The vessel is currently mortgaged to a financial institution and part of the proceeds will be used to pay down the relevant facility.
The net proceeds of US$7.3 million, after the repayment and deducting transaction costs, will form part of the assets of 'Asset Co', the new company to arise from Noble's proposed financial restructuring.
The cancelling date for the delivery of the vessel is April 16.