This follows Goldilocks’ filing of a lawsuit against the company.
Noble Group Limited said in a statement that lawsuits that are filed and could be filed against the company are unlikely to succeed. “The board has been advised that it would be very difficult to successfully wind up the company, which is the only realistic remedy available to such a holder,” it said.
The announcement followed Noble’s first default notice for its $379m bond and Goldilocks Investment’s filing of a lawsuit against the commodities trader. In a writ of summons obtained by Singapore Business Review, Goldilocks alleged the firm and some of its former and current senior executives of overvaluing assets. The shareholder is seeking relief, including US$169.44m based on the remuneration packages awarded between 2011 to 2017, and a declaration by the executives that they abandoned their fiduciary/equitable duties to Noble.
Noble brought up its restructuring support agreement (RSA), which 50% of its senior creditors have already signed, that stops the consignees from taking any “enforcement action” including making a sum payable on demand, pursuing legal action against the company, or petitioning, applying, or voting for any insolvency proceedings.
Moreover, the holders of the 2018 notes that have at least a 25% interest would still need to get the approval of the trustee to file charges against the company. “No noteholder may proceed directly against the company unless the trustee, having become bound to so proceed, fails to do so within a reasonable period of time and such failure is continuing,” Noble said.
It added, “Given the support for the RSA noted above, and the time and cost associated with pre-funding the trustee, the board considers that the likelihood of a group of 2018 noteholders successfully organizing winding up process in respect of the company to be low.”
Noble also noted that the restructuring will be implemented using schemes of arrangement to compromise the existing debt claims of the creditors. “Once the restructuring becomes effective, those creditors will no longer have claims against the company in respect of the existing debt (including the 2018 notes), thereby precluding the possibility of any creditor taking action against the company in respect of its existing debt claims, regardless of whether or not it supported the restructuring,” it added.
In a separate statement, Goldilocks said that whilst it isn’t against a restructuring plan, it is “committed to working with all stakeholders – including creditors, to achieve a restructuring plan which is equitable,” and added, “Goldilocks has been approached by other stakeholders, and is open to working with all who share in the common purpose of negotiating a fair and re-modelled restructuring plan that restores and preserves value for all parties involved.”
Goldilocks noted that it recognises and accepts that a balance sheet restructuring is required to reduce Noble’s debts to a sustainable level. However, “it is important that the restructuring be equitable and transparent. It must not be a plan that is formulated in an opaque process with one particular class of stakeholders, at the expense and to the direct detriment of Noble’s stakeholders generally,” it concluded.
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