Hot stock: Noble up 15%, trading halted on reports of deal reached with creditors

BESIEGED commodity trader Noble Group's stock has soared during trading on Thursday, with the company requesting a trading halt amid reports that it has reached an agreement with its creditors to restructure about US$3.5 billion in debt.

The counter was trading at 30.5 Singapore cents as at 4.04 pm, up 15.1 per cent or four Singapore cents.

Earlier on Thursday, a report by news company Debtwire said that Noble had reached the outline of an agreement with its creditors to restructure about US$3.5 billion in debt, paving the way for an investor to take a controlling stake in the company, citing unidentified sources.

Noble would set up a new company, where employees would own stakes with the option to increase their share if performance targets are met, Debtwire said.

Current equity holders - which include founder Richard Elman - and China's sovereign wealth fund, would have a smaller shareholding than employees, the report said.

Creditors would be given a controlling stake, before selling on to the strategic investor, and the company would resurface with about US$600 million in debt, said Debtwire.

Earlier this week, Noble said that it was in talks with potential investors after a Chinese company, Cedar Holdings Group, was reported by Bloomberg to have made an approach to shareholders, but no formal talks have yet to take place.

Talks with other strategic investors have also been held.

In December 2017, Noble announced that it had received an extension on a loan until May next year, giving it time for negotiations over debt restructuring.