Noble's shares soar as creditor backing for deal tops 75%

London

NOBLE Group Ltd's shares surged more than 60 per cent after senior creditor support for the company's restructuring passed a key threshold, removing one source of uncertainty from the controversial deal on which the trading house's survival depends.

More than 75 per cent of Noble Group's senior creditors have signed the restructuring support agreement, which would see the commodity trader's debt cut in half and its creditors take control, according to the company.

The deal is crucial to Noble's survival. Without it, the trader would be forced into liquidation, it said last month. The 75 per cent threshold is important, because it is the level of approvals the company needs from creditors to implement the accord under a planned scheme of arrangement.

"It's a positive development, but the restructuring plan still requires shareholder approval," said Annisa Lee, head of Asia ex-Japan flow credit analysis at Nomura International (HK) Ltd. "Shareholders want more equity versus the current plan, so that might complicate the restructuring deal."

Noble said it is still negotiating with shareholders and the Singapore Exchange.

Richard Elman, the founder and largest shareholder, is pushing the creditors for a new restructuring deal, people familiar with the matter said this week. The SGX has weighed in against the plan, arguing it isn't fair to shareholders.

In the run-up to the statement, Noble Group's battered shares pushed higher, and they extended gains on Friday. The stock jumped by 62 per cent, the most on record, to 12.6 Singapore cents, rising for a fourth day in the best run this year.

It is still down 37 per cent in 2018. BLOOMBERG