[HONG KONG] Hong Kong-based Noble Group Holdings said on Friday (Dec 17) it had reached an agreement with some of its creditors to significantly reduce debt as part of a restructuring that it hopes will bolster the commodities trading business.

Under the restructuring plan, a group of holders of company bonds due in 2023, worth US$661 million in principal and interest, will exchange the tranche with new notes worth US$350 million and will also get at least a 97.5 per cent stake in a new holding company.

The plan also requires holders of bonds worth US$344 million and due in 2025 to exchange their notes for up to 2.5 per cent of the shares of the new holding company, with the right to acquire more, a company statement said.

The exercise is expected to complete by March 2022, it said, adding besides the debt to equity swap the trading company's trade finance funding has also been increased from US$350 million to US$450 million to help boost its operations.

"From a fundamental balance sheet perspective, this is a comprehensive transaction to get us the capital structure that we believe is a sustainable one for the very long term," said Matt Hinds, executive chairman of Noble Group Holdings.

Noble Group, the former holding company of the group and once Asia's biggest commodity trader, saw its market value all but wiped out from US$6 billion in February 2015 after Iceberg Research issued reports accusing it of inflating its assets.

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To rescue itself, Noble Group, which is undergoing a winding up process in Bermuda, sold billions of dollars of assets, took hefty writedowns and cut hundreds of jobs over the last few years, while defending its accounting practices.

Noble Group Holdings was created in late 2018 as part of that debt-for-equity restructuring process.

REUTERS