Noble lands US$100M trade finance facility with perpetual securities holders

U.S. two-dollar billsPhoto by Leslie Shaffer

Troubled commodity trader Noble said on Friday it had secured a binding commitment for an additional US$100 million three-year trade finance facility with a consortium of investors which are also holders of its shares and perpetual securities.

Noble shares surged 37.5 percent by 14:48 SGT on Friday to S$0.143, touching their highest level since March, although that’s still a far cry from its peaks over S$17.00, touched during the commodities boom in 2011.

The consortium includes Value Partners and Pinpoint Asset Management, both of which had reportedly recently filed and then withdrawn a legal claim against Noble in the High Court of Justice of England and Wales, the filing to SGX on Friday before the market open said.

Noble said the additional financing capacity will allow it to expand its trade flows, particularly in high-growth LNG opportunities.

Paul Brough, chairman of Noble, said the company was “determined” to complete its restructuring plan.

“The provision of additional trade lines dedicated to helping us build out our coal, liquids and LNG trade flows, together with the consortium’s full support of a consensual restructuring, represents an important further step towards allowing New Noble to return to
business as usual,” Brough said in the statement.

The consortium members are also holders of Noble’s US$400 million existing perpetual capital securities, which under the restructuring proposal, will be exchanged into US$25 million of new perpetual capital securities with a right to a non-accumulative dividend of 2.5 percent, the filing said.

In exchange for the trade finance facility, the consortium will receive US$7.5 million in New Asset Co. bonds, US$7.5 million in New Trading Co. bonds, US$10 million in New Trading Hold Co. bonds and an arrangement fee of US$5 million, it said.

It added that US$7.5 million of New Trading Co. bonds that were to be issued to existing senior creditors will be reallocated to the consortium and existing senior creditors will be issued an additional US$7.5 million in New Trading Co. bonds.

That meant the total amount of New Trading Co. bonds to be issued will rise to US$700 million, from US$685 million previously, and the New Trading Hold Co. bonds will rise to US$280 million from US$270 million.

Noble said it was preparing to launch a scheme of arrangement in the U.K. for its restructuring proposal as existing senior creditors representing around 85 percent of outstanding senior claims have agreed to the proposal, well above  the value threshold needed.

It said it was in talks with SGX on the restructuring, with a circular to be dispatched to shareholders “in due course.” A majority of shareholders must agree to the proposal; so far, founder Richard Elman, who holds around 18 percent of the equity, Goldilocks, which holds around 8.1 percent, and the consortium, which holds around 5 percent, appear set to vote in favor.

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