Noble plans to complete restructuring via alternative process

Commodity trader Noble Group intends to press on with its restructuring through an alternative process, and may be seeking court-appointed administration, it said in a statement yesterday.

This comes a day after the authorities here refused to allow the embattled company to transfer its listing status to New Noble as part of its US$3.5 billion (S$4.8 billion) debt restructuring plan, citing potentially inflated assets.

In a filing to the Singapore Exchange, Noble said it is disputing Singapore regulators' allegations of improper accounting, and intends to submit a "comprehensive response" to assessments and questions by the Accounting and Corporate Regulatory Authority (Acra).

Regulators started investigating Noble two weeks ago for suspected false and misleading statements and breaches of disclosure requirements.

Yesterday, Noble said it plans to complete its restructuring to "preserve value for all stakeholders", but in a way that does not involve the transfer of the company's listing status. "In doing so, the board, in discharging its fiduciary duties, may implement the restructuring through a court-appointed officer," it added.

Reports note that moving into administration is likely to wipe out existing shareholders and perpetual bond holders.

While the Monetary Authority of Singapore (MAS), Commercial Affairs Department and Acra started investigations on Noble Group and Noble Resources International on Nov 20, Noble stressed that there are no investigations on specific individuals at the moment, and that the probe centres on "technical accounting-related issues raised by Acra".

Noble Resources International is its key corporate entity in Singapore and the subsidiary that handled most of its coal-trading activities.

Noble added that the accounting issues raised were "not conclusive".

"It is premature to conclude that any charges will be issued by the investigating regulators arising from the investigations," it said.

While regulators had earlier referred to simulated financial statements in suggesting there were significant uncertainties about New Noble's financial position, Noble said these simulations were intended only to illustrate the effects of applying Acra's accounting positions.

The net asset value of New Noble as of Dec 31 last year could be adjusted down by around 40 per cent, but Noble said these simulations also showed that applying the Acra positions would decrease the net loss of New Noble as of Dec 31 last year by around 45 per cent.

It also disputed various points in Acra's letter to it last month. Among other matters, it maintained it has a "strong technical basis for fair value accounting" although Acra challenged the group's derivative treatment for variable marketing contracts.

"The board regrets that after almost 19 months of engagement with its stakeholders, including shareholders, creditors and regulators, it has been informed that MAS and Singapore Exchange Regulation have decided not to allow the company to transfer its listing status," it said.

A version of this article appeared in the print edition of The Straits Times on December 08, 2018, with the headline 'Noble plans to complete restructuring via alternative process'. Print Edition | Subscribe