Noble seeks life as smaller, Asia-centric business

Shares suspended following US$3.5bil debt restructuring deal

SINGAPORE: Shares in Noble Group Ltd, once Asia’s top commodity trader, were suspended from trading, as the company seeks to transform into an Asia-focused coal-trading business following a US$3.5bil debt restructuring deal.

Singapore-listed Noble said last week it had obtained the required approvals, including getting a go-ahead from courts for its restructuring and payment to creditors, clearing the final hurdle to completing its controversial debt-for-equity swap.

Under the lifeline provided by creditors, Noble is halving its debt, in return giving 70% ownership to the creditors, which are comprised mainly of hedge funds. The deal leaves existing equity holders with just 20% in the restructured firm.

Sources familiar with the matter said Noble is expected to name a new board by end-November.

They said shares in the company, which would be called Noble Group Holdings, are expected to list in December.

“Noble should be getting back to business with the new trade financing and its cost of financing will also go down,” said one of the sources, adding that the company is expected to start hiring traders and staff in areas such as risk management.

The lifeline from creditors will allow Noble to get access to US$800mil in trade financing and hedging facilities – crucial in an industry where profit margins are tiny.

Singapore-based Ian Potter, a former senior banker at Morgan Stanley who has been working with Noble in an advisory capacity for the past few months, is to be named its new chairman, the sources said last week.

The sources did not wish to be named as Noble had not made any official announcement about the changes. There was no immediate response from Noble to a Reuters query on the matter.

The company’s market value has been all but wiped out from US$6bil in February 2015 after Iceberg Research questioned its accounts. — Reuters