Noble restructuring on track after nod from Bermuda court

NEW YORK • Embattled commodity trader Noble Group is on track to complete its mammoth restructuring deal after a Bermuda court approved an officer to carry out the plan, using a local kind of insolvency process.

In a brief court hearing last Friday, the judge called the company insolvent and allowed a court-appointed officer to oversee the restructuring.

The green light from the Bermuda court will allow Noble to avoid liquidation after its preferred restructuring plan was scuppered at the last moment by a probe from Singapore regulators. It means that Noble could emerge from restructuring as soon as this week after more than a year of hard-fought negotiations over its US$3.5 billion (S$4.8 billion) debt pile.

The Bermuda court process represents a Plan B for Noble and its creditors. They had hoped to avoid a formal insolvency process, which Noble has previously warned could hurt its contractual relations with counter parties.

But Noble's plan for a consensual debt deal, which involved relisting the company in Singapore, was blocked earlier this month by regulators. The Singapore authorities said the trader would not be allowed to list as a new entity and announced a probe into its finances.

"This is an exceptional case," said Bermuda's Supreme Court Chief Justice Narinder Hargun.

The judge asked whether new Noble would ever be listed on any exchange. Mr Christian Luthi, a lawyer for Noble at Conyers Dill & Pearman, said there are no plans to do so.

 

Still, Friday's decision represents a light at the end of the tunnel for Noble and its creditors. The company said last Friday that it anticipated its restructuring would become effective on Wednesday.

The appointment of the officer, technically called a provisional liquidator, will have "no effect" on operations and business will continue as usual, Noble said in a statement. The company stressed that it will have access to trade finance facilities and will continue making payments to customers and suppliers.

There were some "last-minute hurdles", said Mr Luthi.

The company was thrown into turmoil late last month after the Singapore authorities announced a probe for "suspected false and misleading statements". Noble's accounting had been in focus since early 2015, when a previously unknown group called Iceberg Research first criticised its practices.

As part of the investigation, the Monetary Authority of Singapore is looking into whether officers of Noble Group and Noble Resources International played a role in any breaches of the law.

The authorities also said late last month that they had expanded their probe to Noble's longstanding auditor, Ernst & Young.

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A version of this article appeared in the print edition of The Straits Times on December 17, 2018, with the headline 'Noble restructuring on track after nod from Bermuda court'. Print Edition | Subscribe