Noble Group's Shares Soar as Creditor Backing for Deal Tops 75%

(Bloomberg) -- Noble Group Ltd.’s shares surged more than 60 percent after senior creditor support for the company’s restructuring passed a key threshold, removing one source of uncertainty from the controversial deal on which the trading house’s survival depends.

More than 75 percent of Noble Group’s senior creditors have signed the restructuring support agreement, which would see the commodity trader’s debt cut in half and its creditors take control, according to the company.

The deal is crucial to Noble’s survival. Without it, the trader would be forced into liquidation, it said last month. The 75 percent threshold is important, because it is the level of approvals the company needs from creditors to implement the accord under a planned scheme of arrangement.

“It’s a positive development, but the restructuring plan still requires shareholder approval,” said Annisa Lee, head of Asia ex-Japan flow credit analysis at Nomura International (HK) Ltd. “Shareholders want more equity versus the current plan, so that might complicate the restructuring deal.”

Noble said it is still negotiating with shareholders and the Singapore Exchange. Richard Elman, the founder and largest shareholder, is pushing the creditors for a new restructuring deal, people familiar with the matter said this week. The SGX has weighed in against the plan, arguing it isn’t fair to shareholders.

The company has long said it would prefer to secure shareholder approval rather than complete the restructuring via an insolvency and administration process in the U.K. that could damage its commercial relations.

In the run-up to the statement, Noble Group’s battered shares pushed higher, and they extended gains on Friday. The stock jumped by 62 percent, the most on record, to 12.6 Singapore cents, rising for a fourth day in the best run this year. It’s still down 37 percent in 2018.

To contact the reporters on this story: Jack Farchy in London at jfarchy@bloomberg.net, Denise Wee in Hong Kong at dwee10@bloomberg.net.

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net, Jake Lloyd-Smith, James Poole

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