Noble Group locked in talks with creditors to restructure debt

By Anshuman Daga

SINGAPORE (Reuters) - Commodities trader Noble Group Ltd is negotiating a debt restructuring program with its creditors to stay out of an insolvency process and expects to receive proposals soon, its chairman said on Friday.

Paul Brough, a restructuring specialist who was appointed chairman this year, said the company was pulling out all stops to avoid an insolvency.

"Everybody realises with a trading company that the return in a liquidation would be very low indeed and none of our creditors are suggesting that we have to go into that process," Brough told reporters on the sidelines of a shareholders' meeting.

 

"Retaining customers, retaining people and retaining the confidence of our suppliers are the three things that we've got to focus on here and speed will help us with all of that," he said.

Noble was plunged into crisis in 2015 when Iceberg Research questioned its accounts. Noble has stood by its accounts but a commodities downturn added to the turmoil, triggering a share price collapse, credit downgrades, writedowns and management changes. The company's bonds are trading at distressed levels.

Singapore-listed Noble's market value has plummeted about 85 percent this year to about S$318 million ($236 million) and is down 96 percent from a $6 billion market valuation it commanded in February 2015. On Friday, the shares ended 12 percent higher.

Brough said a compromise had to be reached between Noble and its creditors and the company expects another extension of a waiver on some loan covenants that had already been extended twice till mid-December.

Noble has bank debt of about $1.2 billion and bonds aggregating about $2.3 billion.

Brough said a quick agreement on Noble's debt restructuring will help bring comfort to the company's customers.

"A lot of our contracts are quite long term but some of those supply contracts will come up for renewal next year. And we want to be able to show those customers that we are a bankable proposition, that we are creditworthy, and the sooner we can get the restructuring done, the better," he said.

"We hope to receive proposals from our creditors in the near future. The ball's in their court."

Brough said Noble plans to sell non-core assets such as its palm plantations but said currently it had no plans to sell its Jamaican alumina plant, called Jamalco, one of its most valuable physical assets.

This year, Noble sold its lucrative Americas-focused oil trading business and its smaller gas and power unit as part of a debt-cutting strategy. It reported a net loss of $1.2 billion for July-September and warned that the operating environment remains challenging.

Sovereign wealth fund China Investment Corp, among its biggest shareholders, remained supportive of Noble's efforts to avoid an insolvency process, Brough told shareholders.

($1 = 1.3466 Singapore dollars)

(Reporting by Anshuman Daga; Additional reporting by Umesh Desai in HONG KONG; Editing by Muralikumar Anantharaman)