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SGX Regco calls on Noble's creditors to reconsider restructuring proposal

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SINGAPORE Exchange Regulation (SGX Regco) has become the latest to call on Noble Group and its senior creditors to reconsider its restructuring proposal so as to allow its shareholders to freely vote on the proposal.

In a statement on Thursday evening, the regulatory subsidiary of the SGX said: "SGX RegCo urges senior creditors to reconsider the proposal to ensure parity in the treatment of all shareholders."

Noble has struck a restructuring support agreement (RSA) with creditors holding 55 per cent of its senior debt. The RSA requires approval by a majority of existing senior creditors representing 75 per cent in value of its debt.

Under the RSA, Noble will move its assets into a new company, with existing shareholders receiving a 10 per cent stake in the restructured entity.

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Shareholders' approval for this will be required. But in the event that shareholders as a whole vote against this proposal, Noble Group will take the route of an alternative restructuring, under which it will apply for an administrative order in the UK to sell its assets into the new company.

In this alternative restructuring scenario, shareholders who had voted in favour of the primary restructuring are entitled to receive shares in the new company as they would have if the proposal was passed. Shareholders who voted against it, however, will not receive any new shares.

SGX Regco disagreed with this clause, stating that how a shareholder votes on the primary restructuring should not have any bearing on whether he or she would be entitled to receive shares in the new company under the alternative restructuring.

"SGX Regco will not hesitate to register its concerns about the alternative restructuring - in its current form - with the relevant administrator to be appointed should Noble Group be placed in administration," it said.

It also reminded Noble's shareholders, in deciding on the primary restructuring, to take into consideration the opinion of the independent financial adviser and the terms of the alternatives.

The strong statement by SGX Regco was lauded by the Securities Investors Association (Singapore).

In a press statement by its president and chief executive David Gerald, it said: "Sias strongly supports the SGX RegCo's view and has in fact been in discussion with SGX RegCo."

"It will not be fair for the shareholders who vote against not to receive any shares in the new company. This disparity in treatment must be removed by Noble Group Limited as it would be unfair."

Noble had said in a March 26 announcement that its restructuring is fair and equitable to shareholders on the basis that senior creditors are the economic owners of Noble in a liquidation scenario.

Its third-largest shareholder Goldilocks, however, hit back at the group, saying that alternatives to restructuring contemplated under the RSA are not limited to liquidation.

Goldilocks said the alternative restructuring is an "artificial process" in which the primary goal is to "wipe out those shareholders who oppose the RSA plan".

Noble's shares ended unchanged at 6.7 Singapore cents on Thursday, before the release of the statement by SGX Regco.