Noble swaps notes in Sundance for cash, shares, options worth A$27.6m

Singapore

TROUBLED commodities trader Noble Group is forgoing its convertible notes in debt-ridden Australian miner Sundance Resources in exchange for cash, new shares and options worth A$27.6 million (S$27.3 million).

This includes A$11.9 million in cash, which Noble Group said "will be used for general corporate purposes", as well as 475.8 million new shares, or a 1.5 per cent interest, and 2.38 billion options, which, if exercised, represent as much as another 9.7 per cent of Sundance.

The convertible notes, which had a face value of A$32 million, have been fully impaired and will be cancelled by Australia-listed Sundance under an agreement with note holders on Monday.

The notes were subscribed by Noble Resources International, an indirect, wholly-owned subsidiary, in 2013.

Noble Group said that the transaction does not affect its own planned debt restructuring, as the consideration would be among the assets to be sold and transferred to the new corporate entity in that restructuring. The impact of the debt swop on Noble Group's earnings and net tangible assets per share was deemed to be "not material".

The rationale for the deal given in Noble Group's stock exchange filing on Tuesday was that the transaction "satisfies the relevant notes owed to (Noble Resources International) by Sundance, as well as to allow the company to further consolidate its shareholding interests in Sundance".

"The note holders are also supportive of the need to restructure the balance sheet of Sundance in order to attract new investments to fund Sundance's iron ore project," it added.

Noble Resources International has arrangements for the right to at least half of all iron products from Sundance's Central African Mbalam-Naeba iron ore project in the first 10 years of production - a deal that its parent said will "continue unaffected".

Noble Group shares closed up 0.1 Singapore cent , or 0.763 per cent, at 13.2 Singapore cents.