SINGAPORE (BLOOMBERG)- Noble Group has reached the outline of an agreement with its creditors to restructure about US$3.5 billion in debt, paving the way for an investor to take a controlling stake in the company, Debtwire reported on Thursday (Jan 25), citing sources it didn't identify.
The agreement with bondholders and lenders was reached after meetings in London earlier this week, according to Debtwire. If implemented, the plan would give Noble access to working capital at a cheaper cost, and allow creditors to cash-in on shares obtained from a debt-to-equity swap via a sale to the strategic investor, it said.
Debtwire cited one of its sources as saying a framework had been agreed between the parties, with some issues to be worked through.
An external spokeswoman for Noble Group said she couldn't immediately comment on the report. The company's shares fell 3.8 per cent in Singapore by 10.36am.
Once Asia's largest commodity trader and a challenger to the likes of Glencore, Noble Group has been seeking to secure its immediate future after a three-year run marked by losses, a collapse in its shares and asset sales.
The company has a bond coupon payment that falls due on Jan 29, and a breakdown in negotiations could force it to seek protection from its creditors.
Under the agreement reported by Debtwire, Noble Group would set up a new company, in which employees would own stakes with the option to increase their share if performance targets are met.
Current equity holders, including founder Richard Elman - who at one point turned a tiny trader into a US$10 billion empire - and China's sovereign wealth fund, would have a smaller shareholding than employees, according to the report.
Creditors would be given a controlling stake, before selling on to the strategic investor, and the company would resurface with about US$600 million in debt.
Noble Group said this week it remains in talks with potential investors after a Chinese company, Cedar Holdings Group, was reported by Bloomberg to have made an approach to shareholders. Debtwire said Cedar is a candidate to enter the company and that talks with other strategic investors had been held.