Noble Group Plans ‘Alternative’ Restructuring After Listing Blow

(Bloomberg) -- Embattled commodity trader Noble Group Ltd. said that it intends to push through its complex debt-for-equity restructuring by an alternative process, signaling that it is likely to file for insolvency.

The company may implement the restructuring through a court-appointed officer, the trader said in a statement on Friday after Singaporean regulators blocked a key element of the plan. The statement didn’t give further details.

Key Insights

  • The move -- should it end in administration -- is a significant setback for the company’s creditors, including hedge funds Taconic Capital Advisors, Varde Partners and Owl Creek Asset Management, as well as Deutsche Bank AG and ING Groep NV.
  • The company was considering what’s known as a “pre-pack” administration, a procedure that allows for a restructuring in court through a pre-agreed plan with creditors, a person familiar with the plan said, commenting before Friday’s statement.
  • A move into administration would likely wipe out existing shareholders, and may see perpetual bondholders receive nothing. It may also trigger clauses allowing some counterparties to walk away from contracts, making it harder for Noble to stay in business.
  • It would also be a major blow for Chairman Paul Brough, who’s said he wanted avoid getting embroiled in another bankruptcy after earlier working on Lehman Brothers.

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  • The board, having consulted with the senior creditors “intends to preserve value for all stakeholders by completing the restructuring in the form set out in the circular and the explanatory statement, other than the transfer of the company’s listing status,” it said.
  • “In doing so, the board, in discharging its fiduciary duties, may implement the restructuring through a court-appointed officer,” it added.

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