Singapore/Hong Kong — According to Bloomberg Noble Group has reached the
outline of an agreement with its creditors to restructure about $3.5bn
in debt, paving the way for an investor to take a controlling stake in
the company, Debtwire reported on Thursday, citing sources it did not
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.
A framework had been agreed between the parties, with some issues to be worked through, according to the report.
An external spokeswoman for Noble Group said she could not immediately comment on the Debtwire report.
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 January 29, and a breakdown in negotiations could force it to seek protection from its creditors.
The trader’s 6.75% 2020 notes advanced 3.2c on the dollar to 48.1c at 11.54am Hong Kong time, set for the biggest one-day gain since May 24, according to Bloomberg-compiled prices.
Its 8.75% 2022 notes rose 0.7c to 47.4c. Both securities are at their highest levels since May last year.
Its shares fell 3.8% in Singapore.
New company
Under the agreement reported by Debtwire, Noble would set up a new company, in which employees would own stakes with the option to increase their share if performance targets were met.
Current equity holders, including founder Richard Elman — who at one point turned a tiny trader into a $10bn 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 $600m in debt.
Noble Group said this week it remained 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 was a candidate to enter the company and talks with other strategic investors had been held.
Bloomberg
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.
A framework had been agreed between the parties, with some issues to be worked through, according to the report.
An external spokeswoman for Noble Group said she could not immediately comment on the Debtwire report.
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 January 29, and a breakdown in negotiations could force it to seek protection from its creditors.
The trader’s 6.75% 2020 notes advanced 3.2c on the dollar to 48.1c at 11.54am Hong Kong time, set for the biggest one-day gain since May 24, according to Bloomberg-compiled prices.
Its 8.75% 2022 notes rose 0.7c to 47.4c. Both securities are at their highest levels since May last year.
Its shares fell 3.8% in Singapore.
New company
Under the agreement reported by Debtwire, Noble would set up a new company, in which employees would own stakes with the option to increase their share if performance targets were met.
Current equity holders, including founder Richard Elman — who at one point turned a tiny trader into a $10bn 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 $600m in debt.
Noble Group said this week it remained 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 was a candidate to enter the company and talks with other strategic investors had been held.
Bloomberg
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