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Noble Group shoring up creditor support for US$3.45B debt restructuring

Hong Kong-based commodity trader Noble Group Ltd. said March 14 that it reached a binding restructuring deal with a group of creditors holding about 46% of its existing senior debt and is in talks with other claimants.

The company trades in energy coal, liquified natural gas, carbon steel materials and metals and was once Asia's largest in the sector but now has a market capitalization of about S$223.0 million.

According to an earlier report, the company is racing to strike a restructuring deal ahead of a US$379 million debt maturity March 20.

The board of Noble, which faces a US$400 million debt maturity March 20, has also started looking into moving the company to the U.K. from Hong Kong as part of an alternative restructuring if the current plan falls through, it said.

The alternative plan will involve "seeking the appointment of an English Administrator to sell all of the assets of the company to new Noble," Bloomberg News reported March 14, citing a company presentation.

In the latest offer, the company improved the terms proposed to current shareholders that may have opposed the proposed restructuring by offering them up to a 10% stake in the company upon completion of the restructuring, with an option to split a 15% additional stake with management. The management group will initially also have a 10% stake.

Existing shareholders were offered just a 10% stake in the January plan, while the management team was to hold as much as 20%. Restructuring is expected to take effect in mid- to late July.

All of the existing senior claims, totaling about US$3.45 billion, will be exchanged for a combination of new debt and equity in the company.

Perpetual security holders will be offered US$25 million in new 2.5% capital securities issued by the post-restructuring entity. Previously they were offered US$15 million in cash.

The agreement includes a provision for a new three-year US$600 million trade finance and a US$100 million hedging facility fully underwritten by the company's ad hoc group and Deutsche Bank AG.

Noble added that its ad hoc group of creditors, who own the 46% of the senior claims, is in talks with creditors holding another about 15% of the claims and there is broad support for the plan.

In January, the company reached an agreement in principle to restructure US$3.4 billion in senior debt by converting half, or about US$1.7 billion, into new equity. Earlier this month, the company decided not to pay the coupon due March 9 on its US$750 million notes maturing 2022, pending the debt restructuring deal.