As per the deal, the company’s senior creditors will restructure Noble’s existing senior debt for 70% of the company. This would dilute existing equity holders’ combined stake to 10% while the other 20% will be owned by the management.
The proposed restructuring deal would significantly reduce the company’s senior debt to $1.7bn.
Noble said that the proposed financial restructuring provides sustainable capital structure for the company as it focuses on its hard commodities, freight and LNG businesses.
The firm also plans to strengthen its position as the industrial and energy products supply chain manager in the Asia Pacific region.
Noble chairman Paul Brough said: "This agreement marks the beginning of the final phase of our restructuring, and the creation of a new Noble as a focused and appropriately financed group set to capitalize on the high-growth Asian commodities sector.”
Brough noted the agreement will reduce company’s indebtedness to sustainable levels and complies with the company’s size and range of activities.
The deal is subject to approval from shareholders and regulators. It is planned to be implemented through a court-led statutory procedure.
Noble said in a statement: “The proposed debt-to-equity swap, together with the issuance of equity to retain and incentivize the Group’s management team (at the request of the Ad Hoc Group), is expected to result in dilution of existing shareholders’ interest in the Group post-restructuring.”
The restructuring deal also includes three-year committed trade finance and up to $700m of hedging facility for the company’s commodities trading businesses.
Image: Noble Group signs an in principle agreement for financial restructuring. Photo: courtesy of adamr/ FreeDigitalPhotos.net.
