Noble expects creditors' proposal soon

Chairman says it must get back on even keel before it loses staff, customers or suppliers

Noble Group expects to receive a proposal from its creditors in the near future, said chairman Paul Brough yesterday.

The guidance came as the distressed firm looks to get back on an even keel before it loses any customers, suppliers or employees.

"We need to get back to business-as-usual quickly," Mr Brough said on the sidelines of the firm's special general meeting.

Doing so will allow the firm to retain its key traders - "which is very important to us" - and its relationships with customers and suppliers, he added.

Furthermore, coal supply contracts are usually negotiated at the start of every year.

"A lot of our contracts are quite long-term, but some of those will come up for renewal next year. And we want to be able to show those customers we're a bankable proposition, that we're creditworthy. The sooner we can get the restructuring done, the better," said Mr Brough.

He added that the firm's customers have been "very loyal" thus far, and that they see a need for an independent trader such as Noble.

Shareholders approved the sale of North Americas Corp (NAC) - its global oil liquids unit previously described a crown jewel - with 99.96 per cent voting for the resolution in an orderly, hour-long meeting.

The group expects to receive cash proceeds of US$575 million (S$774 million) from the sale, based on Sept 30 figures. Its remaining business will not be able to generate enough cash to repay its debts of US$3.5 billion, Mr Brough said.

"But we are still here - remarkably so I think. And while we are still here, there's hope for our business and there's hope for our shareholders - and that's what I can offer you at the moment."

He added that the group's discussions with its creditors have been "rational and sensible", and that he hopes to reach a conclusion to the talks soon.

NAC is the latest in a string of assets that Noble is selling in order to reduce its level of debts. It has offloaded Noble Americas Gas & Power Corp for US$102 million, and announced the sale of four vessels for US$95 million two weeks ago.

The firm is now looking to sell off its palm plantations, but "have no plans at this time" to sell Jamalco, its alumina production plant in Jamaica, said Mr Brough.

Noble will have a covenant waiver on its US$1.1 billion revolving credit facility expiring on Dec 20.

Mr Brough, however, was not troubled by this. The deadline has been extended twice, and "I don't see it being a particular problem for us" to extend it again, he said.

The next milestone for the group will be an agreement with its creditors on the restructuring.

This would also help the group to secure more credit facilities, which will allow it to engage in trading activities more profitably.

"There are signs, looking at the macroeconomic data, that 2018 may be a little bit more benign," Mr Brough told shareholders.

"But if we can't get the facilities we need to trade, then we will miss that uptick in the economy."

Noble shares rose 2.5 cents or 11.6 per cent to 24 cents yesterday.

A version of this article appeared in the print edition of The Straits Times on December 16, 2017, with the headline 'Noble expects creditors' proposal soon'. Print Edition | Subscribe