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BT EXCLUSIVE

New Noble's board to have up to 5 IDs

It's looking at eight to nine directors, mostly based in the Asia-Pacific

2018-08-13T042841Z_668857886_RC17B58778F0_RTRMADP_3_NOBLE-GROUP-RESULTS.JPG
The board of the "New Noble" - a fresh company which will emerge on the Singapore Exchange out of a complex US$3.5 billion debt revamp of troubled commodities trader Noble Group - will begin with a clean slate of eight or nine directors, mostly based in the Asia-Pacific, said Noble's outgoing chairman.

Singapore

THE board of the "New Noble" - a fresh company which will emerge on the Singapore Exchange out of a complex US$3.5 billion debt revamp of troubled commodities trader Noble Group - will begin with a clean slate of eight or nine directors, mostly based in the Asia-Pacific, said Noble's outgoing chairman.

"Our marching orders to the head hunters (Spencer Stuart) is that we are looking for some ASPAC representation on the board with both deep sector skills and board level experience " Noble's chairman Paul Brough told The Business Times. He added that the company was at an "advanced stage" of identifying a chairman for New Noble. Mr Brough, a British-born turnaround expert who replaced Noble's founder and majority owner Richard Elman in May last year as chairman and led the ailing firm's rescue plan that jumped over a major loop recently after shareholders voted overwhelmingly in its favour, has said the restructured firm will have a new chairman and he will bow out once the revamp was complete.

"This will need to be an active board, given the need to rebuild the business and deal with some key strategic decisions over the next couple of years," he added.

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The composition of New Noble's board will be announced before the restructuring is completed - expectedly in November - and will comprise two individuals from the company's top management and one representative each from Abu-Dhabi based investment fund Goldilocks (old Noble's third largest shareholder) and senior creditors (new Noble's majority owner with a 70 per cent stake) plus up to five independent non-executive directors.

Mr Brough also added that in the interim, one director from old Noble will likely join the new board.

"The transition from Old Noble to New Noble is quite complicated and it may serve New Noble well if a director from Old Noble was to serve on the New Noble board in an interim basis, to help this process," he added.

In a letter from the Ad Hoc group (AHG) of senior creditors through its financial adviser Houlihan Lokey dated Sept 13 that was released by Noble on Monday, the group said New Noble's proposed "world-class board" will be selected through a rigorous and independent executive search process.

AHG described Noble Group's restructuring, which had faced challenges on several fronts including reconciling the interests of a "bewildering array of creditors", binding-in creditors through a series of UK and Bermudian schemes of arrangement and tackling a broad range of tax, accounting and regulatory issues, as one of the "most complex, sophisticated and high profile restructurings of recent years" globally.

The group said it had weighed other options such as winding down the trader's business and a sale to a strategic investor before it settled on backing Noble's management team on the stand-alone business restructuring as the team was well positioned to execute a turnaround and meet business targets.

AHG also addressed a major beef among Noble's "public critics" (read: chiefly Iceberg Research), saying that as part of its review of restructuring alternatives, the AHG and its financial advisors conducted a financial and business diligence focusing on matters raised on the trader's financial statements. "It is important to note that for the AHG, the balance sheet write-downs over the past 12 months conservatively recalibrated asset valuations. Going forward, the AHG looks to the new board to take a similarly conservative approach to non-cash accruals specifically, and accounting matters generally," it added.

Iceberg's volley of attacks against Noble began three years ago on serious allegations that the trader was overstating the value of assets.

"The new board will conduct a comprehensive review of corporate accounting and risk management policies as part of its commitment to best practice governance arrangements," the AHG added.

In an update on the group's financial restructuring issued on Monday, Mr Brough said the restructuring was making "strong progress" on the back of positive momentum following a pivotal gathering on the do-or-die rescue deal on Aug 27 where shareholders voted overwhelmingly in favour of the plan. This also includes disposals of two more vessels by the beleaguered firm, bringing the total to four vessels sold for a total US$95 million of which US$63 million will be used to retire debt.

Noble stock shed 0.5 Singapore cent or 3.7 per cent to finish at 12.9 Singapore cents on Monday.