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Noble Group confirms restructuring deal reached; existing shareholders to own 10% of new entity

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In an announcement on Monday evening, Noble said that a group of its senior creditors, who represent about 30 per cent of its bonds and revolving credit facility, has agreed to swap their debt for a combination of new debt instruments and equity in the restructured group.

DISTRESSED Noble Group has reached an agreement with some of its senior creditors in a scheme that would slash its existing debt by half and leave its current shareholders with only 10 per cent in the new group.

In an announcement on Monday evening, Noble said that a group of its senior creditors, who represent about 30 per cent of its bonds and revolving credit facility, has agreed to swap their debt for a combination of new debt instruments and equity in the restructured group.

They will also provide the group with a three-year committed trade finance and hedging facility of up to US$700 million - on competitive market terms - for its commodity trading businesses.

This will leave the new entity with reinstated debt of less than US$685 million.

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The new holding company will ultimately be 70 per cent owned by senior creditors, 20 per cent by the management, and 10 per cent by existing shareholders.

With the restructuring, the group will be "stable, independent, competitive and positioned for sustained growth", said Noble chairman Paul Brough in a statement.

"This agreement marks the beginning of the final phase of our restructuring, and the creation of a new Noble as a focused and appropriately financed group set to capitalise on the high-growth Asian commodities sector," he added.

Joseph Swanson, senior managing director of Houlihan Lokey, which was the financial adviser to the creditor group, said that the creditors continue to support the firm's management as they prepare to reposition the business.

"Our collective goal in this process is to ensure that the group is properly capitalised going forward - not only to enable the group to continue servicing its clients but also to invest in the future and expand the franchise."

Noble plans to launch a Restructuring Support Agreement for its creditors to vote on the proposed restructuring, and plans to implement it through schemes of arrangement in the relevant jurisdictions.

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