Noble Group announced the deal to restructure US$3.5 billion in debt last month, averting bankruptcy after a three-year crisis marked by losses, writedowns and controversial accounting. Since the plan was unveiled, the proposal has drawn fire from one of its top shareholders, as well as some bondholders. The company said the discussions on the proposal continue to be productive.
The expected loss for the fourth quarter “results in a negative net-asset position for the group in the range of US$650 million to US$850 million at Dec. 31 2017,” it said. “However, the board believes that the proposed restructuring, once implemented, should restore shareholders’ equity and create a sustainable capital structure which will allow the group to rebuild its business in Asia where it continues to enjoy a market-leading position.”
For the full year, the net loss is seen between US$4.78 billion and US$4.98 billion. Of the expected loss for the fourth quarter, US$50 million to US$100 million was made on continuing operations in hard commodities, freight and LNG, and a further US$225 million to US$275 million was in energy businesses it’s sold, the company said. There was a further exceptional loss of US$1.45 billion to US$1.55 billion, including non-cash mark-to-market losses on derivatives positions.
Under the rescue plan, which has been backed by some creditors, the agreement will see about half of the debt, including bonds, switched into new equity, with perpetual bondholders offered a few cents on the dollar. All existing shareholders will get a 10% stake in the revamped company.
Noble Group said the ad hoc group of creditors that it’s in talks with over the debt plan controls 36% of its senior debt – obligations that include bonds due in 2018, 2020 and 2022 as well as credit facilities. In addition, the ad hoc group’s advisors are in talks with holders of a further 15% of the senior debt, who “have indicated their broad support” for a restructuring.
As part of the proposed restructuring, Noble Group has reached an agreement in principle with the creditors’ group and ING Groep NV, as fronting bank, for a three-year US$700 million trade-finance facility. The facility is to be made available when the restructuring is effective, it said.
As at 9.42am, shares in Noble are up 1 cent at 20 cents.
