Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Once mighty Noble Group faces insolvency protection after re-listing ban

Stock MarketsDec 07, 2018 03:40AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Noble Group faces regulatory probe, days before closing $3.5 bln restructuring deal

By Anshuman Daga

SINGAPORE (Reuters) - Noble Group (SI:NOBG) said on Friday it will seek changes to its original debt restructuring plan, with the spotlight now moving toward what the once mighty commodity merchant has called the alternative: insolvency protection.

In an unusually strong move, Singapore on Thursday issued a joint statement by police, the Monetary Authority of Singapore (MAS), and Singapore Exchange regulators that barred Noble from re-listing on the local bourse, which was part of its end-game strategy in a controversial $3.5 billion debt-for-equity re-structuring plan.

The statement by Singapore authorities cited the start of an investigation into Noble for potential improper accounting.

The commodity trader, which saw virtually all its stock market value wiped out before trading was suspended on SGX in November, said it had consulted its creditors and would take steps to implement the restructuring by an "alternative process", which may involve a court-appointed officer.

GRAPHIC: 1997 to 2018: The rise and fall of Noble Group - https://tmsnrt.rs/2PEZb2j

PLAN B?

Noble, Asia's biggest commodity trader at one time, said Singapore's block to re-listing was a "very disappointing development" and said it plans to restructure in forms other than by re-listing in Singapore.

Noble did not specifically say on Friday it would seek insolvency protection, but the company has openly warned this year that if its $3.5 billion restructuring plan fails, it would begin insolvency proceedings, likely in Britain.

"Plan B is bad for shareholders and perpetual bond holders as there is no listed entity that they can hang their already thin hopes on," said Mak Yuen Teen, an associate professor of accounting at the NUS Business School.

The re-structuring deal itself, one of the most complex negotiated in recent years, has been highly controversial, but it saved Noble from near-certain collapse.

Noble's troubles began after Iceberg Research questioned its accounts in February 2015. To save itself, Noble has sold billions of dollars of assets, including its core businesses, taken hefty writedowns and cut hundreds of jobs, while defending its accounting. The trader had a market value of $6 billion nearly four years ago.

Under the proposed debt-for-equity deal, Noble's debt would be halved. In return, Noble's creditors, made up mostly of hedge funds, would own 70 percent of the restructured business, while existing shareholders' equity would be reduced to 20 percent and Noble's management would get 10 percent.

Dubbed "New Noble", the company wanted to transform itself into an Asia-focused coal-trading business. It was looking to list the overhauled business as part of the restructuring.

Singapore's regulator and authorities, though, took the decision to block Noble's deal after reviewing the findings of a probe, concluding that "there are significant uncertainties about the financial position of New Noble".

Mak said the authorities' move was "unprecedented" but added that there also had never been case as complicated as Noble's, "where a restructuring with the proposed listing of a new entity happens with such serious regulatory issues hanging around it."

Once mighty Noble Group faces insolvency protection after re-listing ban
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email