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Noble signs restructuring deal with senior creditors, significantly cutting down on debt

Deal Street Asia 2018-03-14 10:27:32

Noble signs restructuring deal with senior creditors, slashing debt

FILE PHOTO: The reception of Noble Group is seen at its headquarters in Hong Kong March 23, 2015. REUTERS/Bobby Yip/File Photo

Noble Group Ltd. has signed an agreement with a group of senior creditors on a debt restructuring, marking further progress in a deal that will halve the company’s debt and give creditors control of the embattled commodity trader.

The ad hoc group of creditors that signed a binding restructuring support agreement represents 46 percent of the senior debt, Noble said in a statement Wednesday. Deutsche Bank AG has signed the plan while ING Bank NV is in process to accede to it.

With the agreement in hand, Noble could solicit consent from other senior creditors. Together, Deutsche Bank and ING Bank represent a further 4 percent of the existing senior claims. The ad hoc group is also in talks with creditors holding about 15 percent of its senior claims who have indicated their broad support for the plan, according to the statement.

The agreement marks a step toward survival for Noble, which is teetering on the brink of collapse in a saga that started three years ago when then-unknown Iceberg Research began publishing critiques of its accounting. Since then, the company has been battered by losses and its stock driven to near two-decade lows. The Hong Kong-based trader announced a deal to restructure $3.5 billion in debt late January.

Among terms in the restructuring pact, Noble Group will get a $600 million three-year trade finance facility, a type of funding that’s backed by actual supplies of commodities, and a $100 million hedging instrument. The company has also improved the payout for holders of perpetual bonds, which don’t have a maturity date, to $25 million, from $15 million tabled in January.