Noble said in a stock market announcement that the restructuring support agreement (RSA) had been reached with an ad hoc group representing 46% of the group’s existing senior creditors. In addition, creditors and future and current trade finance providers Deutsche Bank and ING Bank, the latter of which is in the process of seeking credit approval to accede to the agreement, will add another 4% of existing senior claims holders, it added. Noble also said a further approximately 15% of existing senior creditors had indicated broad support for the restructuring proposals.
“The proposed financial restructuring envisages that all of the existing senior claims and certain other unsecured liabilities that rank equally with the existing senior claims will be exchanged for a combination of new debt instruments and equity in the group post-restructuring,” Noble said.
These current debts include: $379m, $1.18bn and $750m in outstanding senior notes due in 2018, 2020 and 2022 respectively, as well as $1.14bn in outstanding loans under a revolving credit facility.
Meanwhile bondholders of the $400m outstanding perpetual bonds will essentially be asked to take a hair-cut deal, voluntarily exchanging their bonds for a new $25m 2.5% non-accumulative pay-if-you-can perpetual capital security instrument.
The agreement includes the provision of a new three-year committed trade finance and hedging facility of $700m Noble also confirmed that during the restructuring period, its uncommitted interim trade finance facility remains in place and will be expanded with the inclusion of Deutsche Bank.
Other key points from the deal include Noble’s commencement of a process to move its centre of main interests to the UK from Hong Kong and the listing of the post-restructuring group, New Noble on the Singapore Exchange.
After the transaction, the group will be owned 80% by senior creditors, 10% by management and 10% by existing shareholders,
“The Group expects to have adequate headroom in its interim trade finance facility to support the business until the completion of the restructuring,” it said. Noble envisages the exercise to be completed in mid to late July.
The deal however still needs several key consents to be given. “The proposed financial restructuring is subject to regulatory approval, shareholder approval, implementation via one or more schemes of arrangement, and ancillary recognition orders,” Noble noted.
“The proposed financial restructuring will provide the Group with a sustainable capital structure to deliver long-term value for all of its stakeholders, as the Group focuses on its Hard Commodities, Freight and LNG businesses and in solidifying its position as the leading industrial and energy products supply chain manager in the Asia Pacific region. The Group believes the proposed financial restructuring also sets a firm foundation in creating options for future strategic alliances and additional business opportunities,” Noble concluded.
“Throughout the process, we as a Board have sought to work with and treat all our stakeholders in a fair and transparent manner. The RSA is a critical step in the Group’s restructuring and I firmly believe that the strong level of support it has received is testament to the appropriateness of this approach. This RSA sets out a clear pathway to providing the Group with a sustainable capital structure and a strong foundation from which to deliver long-term value for all its stakeholders,” said Noble chairman Paul Brough
“The signing of the RSA is a landmark moment for the Group and with this agreement the Group has entered the final phase of its balance sheet restructuring. We look forward to consents from creditors outside the Ad Hoc Group which will smooth the path towards closing the transaction and allow the Company to shift its focus to client service and operations,” said the ad hoc group’s financial advisor, Houlihan Lokey senior md Joseph Swanson.