SINGAPORE - Noble Group has won over its founder and largest shareholder Richard Elman to its restructuring plan, after tweaking the proposal to provide current shareholders 15 per cent of new equity in New Noble and agreeing to give Mr Elman a seat on the new board.
The group had previously proposed to provide shareholders with 10 per cent equity in New Noble, the slimmed down group that will emerge from the restructuring, plus up to a further 7.5 per cent on a pre-diluted basis through options provided to the management which is obliged to share these with shareholders.
Mr Elman had resigned from the board last month due to "differences of opinion" with Noble's directors and creditors over its future. He was reportedly pushing to raise the stake that current shareholders will get in the restructured firm to 15-20 per cent.
In its announcement on Monday afternoon (April 16), Noble said it has also agreed to appoint Mr Elman as an executive director to the board of New Noble.
In return, Mr Elman, who holds 17.9 per cent of Noble through Noble Holdings Limited (NHL), has given an irrevocable undertaking to support the restructuring.
Said Mr Elman in Noble's statement: "Having founded Noble over 30 years ago, the last three years have been particularly difficult for the company and for me personally. The revised structure granting shareholders 15 per cent equity in New Noble has my full support. Under the circumstances, I believe the allocation of 15 per cent is fair to all shareholders and I hope that others will vote in favour of the revised proposal as I have agreed to."
The amended restructuring plan will enable Noble's management to rebuild its business around the Asian trading franchise which has demonstrated "incredible resilience" during this challenging period, he added.
"I am confident in our management team, they have shown great loyalty and resolve in protecting our core businesses and I look forward to supporting the re-build and growth of New Noble in any way I can."
Noble chairman Paul Brough said that the important commitment from NHL, combined with the group gaining support from more than 75 per cent of its creditors as required for its restructuring, demonstrate that it is now "firmly entering the last stage and seeing material progress" in the restructuring.
"We welcome the endorsement of Richard Elman," he said in the statement. "As the company's founder, Richard's experience and knowledge make his support uniquely important and, as a director, these qualities will assist New Noble in the realisation of its potential and, once again, delivering value to all our stakeholders. We progress through this restructuring process with growing confidence of a positive outcome for all stakeholders."
The firm also updated that senior creditors representing over 83 per cent of Noble's debt have acceded to the restructuring support agreement (RSA). The company needs 75 per cent approval from creditors to implement the accord under a planned scheme of arrangement.
Noble added that it "remains confident" more creditors will join in support in advance of the scheme meetings.
Noble's shares, which have surged in recent trading sessions as more senior creditors signed the RSA, climbed to as high as 13.6 Singapore cents on Monday morning before a sharp plunge.
It rebounded slightly to trade at 12.7 Singapore cents as at 4.01pm, up 0.1 cent or 0.8 per cent from the previous close.
The stock was the fourth most active stock on the Singapore Exchange, with some 24 million shares changing hands.