Noble’s latest rescue plan seeks to reappoint founder to board
THE founder of commodities trader Noble Group could be in line for a shock return to the board after the stricken firm revised its rescue plan.
Singapore-listed Noble, which has been scrambling to pull a restructuring deal together since the start of the year, said it would make Richard Elman an executive director once more, after he resigned last month.
The company infuriated shareholders earlier this year when it unveiled a plan that would see a group of its biggest creditors take a 70pc stake in the group in return for fresh capital.
Under the plan, management would have been handed a stake worth up to 20pc, leaving existing investors with just 10pc.
Noble said the new plan would raise the stake for shareholders to 15pc. It now has the backing of more than 75pc of creditors for the restructuring, which must still go to a vote of shareholders. Mr Elman, the British-born metals trader who founded Noble in Hong Kong in 1986, presided over a rapid expansion in the company but stepped back from day-to-day management last year after its mounting losses led to collapse in its share price. Its market cap once touched $10bn (£7bn) but now stands closer to $140m.
Mr Elman said the last three years “have been particularly difficult for the company and for me personally” but that the new deal was “fair” to shareholders.
Paul Brough, chairman, said Mr Elman’s support was “uniquely important” and his experience and knowledge would “assist New Noble in the realisation of its potential and, once again, delivering value to all our stakeholders”.
The move was labelled a “total joke” by activist research group Iceberg, which first flagged problems in Noble’s accounting in 2015 when it published a series of bombshell reports.
“With the same management and same directors, the new Noble looks awfully like the old Noble,” an Iceberg spokesman said. “The other shareholders and perpetual [bond holders] are far from happy.”
Noble started life supplying steelmakers in China with coal from Indonesia, before going on to ship metals, grains and coffee all over Asia. The rescue plan would see Noble shrink back to its earlier form.
However Noble’s rescue is by no means assured. Its plan has been criticised by the Singapore Stock Exchange over concerns it may be treating shareholders unfairly, while one of its biggest investors, Abu Dhabi-based Goldilocks, has threatened a lawsuit.