Noble looks to Bermuda court in restructuring bid

Group warns it will go into full liquidation process if last-resort course of action fails

Embattled commodities trader Noble Group plans to apply to the Bermuda court in order to implement its restructuring, the firm said in a statement yesterday.

If it wins the court's approval in a hearing, which is expected to take place on Friday, the restructuring is to take effect on Dec 18.

The firm, in a Singapore Exchange filing yesterday, said it "considers this course of action to be the only means available to it to implement the restructuring in the interests of all stakeholders, including existing shareholders of the company".

This is because existing shareholders will still be allocated a 20 per cent interest in New Noble, it said, despite Singapore regulators' earlier refusal to allow a transfer of Noble Group's listing status as part of its restructuring plan. The authorities here cited potentially inflated assets and said there were "significant uncertainties" about New Noble's financial position.

Noble yesterday said that its approach is intended to preserve the underlying business for the benefit of its stakeholders.

It added: "Existing shareholders of the company would still receive the New Noble shares to be allocated to them and, therefore, will continue to participate in any potential recovery upside."

But if the company is unable to complete its restructuring in line with this approach, it will be forced to enter a full liquidation process, said Noble.

 

This will result in "no recovery for shareholders and holders of the company's perpetual capital securities", and also materially affect recoveries for creditors, it noted.

Noble plans to ask the Bermuda court on Friday to appoint an officer to implement the restructuring.

Given that the effective date of the restructuring should be Dec 18, if the court order is made on Friday, Noble has agreed to an extension from Dec 11 to Dec 31 to have more time to complete the restructuring.

The firm, whose shares are suspended, initially intended to relist on Nov 27, but the deadline was pushed back to no later than Dec 11 after the authorities here said they were investigating the firm.

Allegations against Noble came to light about three years ago when an Iceberg Research report claimed the trading house's long-term contracts were probably overvalued. This triggered a US$10 billion (S$13.7 billion) collapse in its market capitalisation.

"The board remains of the strong view that the restructuring is in the best interests of all of the company's stakeholders, including its creditors and shareholders," said Noble, adding that day-to-day operations will be unaffected.

A version of this article appeared in the print edition of The Straits Times on December 12, 2018, with the headline 'Noble looks to Bermuda court in restructuring bid'. Print Edition | Subscribe