Noble’s turnaround strategy has received an important boost after its senior bondholders approved the crisis-hit commodities trader’s proposal to restructure its debt.
In a statement to the Singapore Exchange, Noble said it had received support from 75% of its senior creditors by value to push forward its $3.5 billion debt restructuring plan, a crucial step to keep the business out of formal insolvency proceedings.
“The company remains confident that the number of creditors acceding into the RSA (restructuring support agreement) will continue to rise in advance of the scheme meetings,” Noble said in the statement on late Thursday.
Noble said it was negotiating with its equity shareholders and the Singapore Exchange on the restructuring.
Under the revised restructuring deal announced last month, Noble is asking its senior bondholders to take a 50% haircut in exchange for a 70% stake in the restructured business, and to distribute about 30% of the business to its existing equity shareholders and management team.
Meanwhile, holders of the Singapore-listed $400 million perpetual bonds will receive new securities with a face value of $25 million, up from the original all-cash offer of $15 million it first proposed in late January.
Noble’s proposal to convert its senior bonds into the equity of a new company has unleashed a backlash from its existing equity holders and perpetual bondholders, who are pushing for better restructuring terms. Iceberg Research, which has attacked the company since 2015, said last week that the company has “zero chance” to survive even after the restructuring goes through.
Earlier this week, Latham & Watkins, a legal advisor to the perpetual bondholders, requested that the Singapore Exchange oppose Noble’s restructuring plan. This effort to block the deal is in addition to another lawsuit filed weeks ago by Abu Dhabi-based Goldilocks Investment against Noble in the Singapore High Court.
The perpetual bond holders have limited recourse to battle Noble's plans. It remains unclear what tactics they might pursue if the equity shareholders agree to the restructuring.
In a statement last Thursday, the regulatory unit of SGX urged Noble’s senior debt holders to assess the company’s restructuring plans to “ensure parity in the treatment of all shareholders”.
A SGX spokeswoman has declined to comment on Noble’s latest statement.
Noble warned last month that it would begin insolvency proceedings if the debt restructuring was not approved.
On a brighter note, Singapore-traded shares in Noble rallied more than 50% in early trading on Friday, before finishing up 62% to S$0.126. Before the big rally on Friday, its major equity shareholders including Prudential and Orbis had reduced their stakes in Noble, after the company defaulted on its debt obligations last month.