It attacked the points made by chairman Paul Brough in a letter to shareholders.
The battle in Noble Group rages on as its top shareholder and Abu Dhabi-based fund Goldilocks Investment lodged a letter rejecting all director candidates put forward by the company for re-election at the annual general meeting on 30 April 2018. This follows chairman Paul Brough's letter to shareholders filed the night before.
Through the letter, Brough announced that three new independent non-executive directors (INEDs), together with David Eldon, Christopher Pratt, David Yeow, and Wayne Porritt, were recently added to the Board: Fraser Pearce, Andrew Herd, and Tim Isaacs. "The new INEDs all have significant financial restructuring experience and will strengthen the Board as it works through the final phase of the restructuring," he added.
Goldilocks said that Pratt "did not speak out or take any action to prevent gross injustices" which included disregarding transparency standards and mismanagement. It also said that the four other INEDs, Porritt, Herd, Isaacs, and Pearce, lack the qualifications for the position and that there was no consultation with shareholders over their appointment.
Moreover, the fund pointed out that the appointment of Herd, Isaacs, and Pearce "is solely for the purpose of implementing the Company’s artificial attempt to establish its COMI in the UK. The COMI Pretense is designed to deprive shareholders of any voice in the Company’s restructuring process. The COMI Pretense ignores the Company’s real and tangible connections to Singapore and Hong Kong," it said.
Goldilocks urged all shareholders to join it in opposing the plan and vote against Noble’s director candidates. The fund recommended five people to be nominated as IMEDs, namely, Ajit Vijay Joshi, Bachir Nawar, Khoo Song Koon, Chow Wai San, and Lim Yu Neng Paul. "Director nominees proposed by Goldilocks will bring a fresh perspective to the board and will strive to protect shareholder rights," it claimed.
Meanwhile, Goldilocks added Brough's letter is "riddled with assumptions and inaccuracies. Most alarmingly, Mr. Brough continues to threaten shareholders with insolvency proceedings."
Brough said that during the restructuring negotiations with the company’s creditors, the Board has consistently taken the view that all creditors must be treated fairly and equally given their so-called “pari passu” legal status. "This is the foundation of the RSA. Notwithstanding this and the Board’s fiduciary duties, the Board has also taken concerted steps to protect the rights and
interests of other stakeholders including holders of the Perpetual Securities and shareholders," he said.
"This has not been easy in the face of the position taken by the Company’s creditors who have at all times maintained that neither the Perpetual Securities holders nor the shareholders have any remaining economic interest in the Company, given the significant write off that the creditors have agreed to accept. The creditors will write off approximately US$1.8b of senior unsecured debt as part of the restructuring," Brough added.
Noble's defaults have also reached US$3.4b, the chairman said.
Goldilocks responded, "Having driven Noble to the brink of insolvency, Mr. Brough recently proclaimed that the creditors are the economic owners of Noble and he has now handed Noble to the creditors under the Plan. He has also terrorized shareholders with the COMI Pretense referred to in the Rejection Letter."
Brough's letter indicated that if the requisite majority of shareholders do not support the restructuring, the restructuring support agreement (RSA) contemplates implementation of the restructuring through a prepackaged administration process in the UK. "In such event, shareholders and holders of the Perpetual Securities, who are both considered to be 'out of the money', and given their position in the Company’s capital structure, will receive nothing," he said.
Brough claimed that the holders of the perpetual securities do not enjoy the priorities bestowed on other creditors in terms of the repayment of these debts.
The chairman also announced that it will amend the RSA to enable shareholder freedom of choice in voting on the restructuring. "Shareholders should note that, if more than half of the shareholders vote against the restructuring at the Special General Meeting, it is likely that the Company will enter into a formal insolvency or bankruptcy process," he added.
Brough concluded the letter by urging shareholders to vote in favour of the directors and the restructuring at the annual general meeting. He added, "If you are a holder of Perpetual Securities you should participate in the exchange offer set out in the RSA... If you are a creditor you should accede to the RSA and vote in favour of the restructuring at meetings of creditors that will be convened for the purposes of approving so-called 'Schemes of Arrangement.'"
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