Noble Group Ltd., on Feb. 19 estimated expected losses for the last quarter and full year 2017, saying operating conditions remained challenging in the three-month period ended Dec. 31, 2017.
The company expects the last quarter's net loss to widen to between US$1.73 billion and US$1.93 billion, from the US$1.17 billion net loss booked in the third quarter. This estimated loss will lead the group to book a full-year net loss of US$4.78 billion to US$4.98 billion, swinging from 2016's US$8.7 million attributable net profit.
Bulk of the estimated losses in the fourth quarter was attributed to exceptional items, including noncash losses of up to US$1.55 billion relating to the company's mark-to-market derivatives portfolio.
According to Noble Group, the fourth-quarter net loss will leave the company in a negative net asset position in the range of US$650 million to US$850 million by Dec. 31, 2017, but noted that its proposed debt restructuring will restore shareholders' equity and create a sustainable capital structure, once implemented.
In late January, the company said it reached an in-principle agreement to restructure US$3.4 billion in senior debt by converting half, or about US$1.7 billion, into new equity.
Talks for the debt deal are still continuing, with an ad hoc group progressing discussions with holders of the group's existing senior debt instruments. The ad hoc group aims to launch the restructuring support agreement that will complete Noble Group's proposed debt restructuring.
Currently, the ad hoc group represents holders of approximately 36% in aggregate of the company's existing senior debt instruments. These debt holders are also in contact with creditors holding a further 15% of Noble Group's senior debt instruments, who have expressed support for the restructuring.
As part of the proposed deal, Noble Group reached an agreement in principle with ING for a three-year committed US$700 million trade finance facility. This facility will be made available upon the effective date of the debt restructuring to support Noble Group's commodities trading business, subject to certain conditions.