Noble shareholders approve restructuring proposal overwhelmingly

Noble Group said on Monday that its shareholders overwhelmingly approved its restructuring proposal, which the troubled commodity trader has previously indicated was necessary to the company’s continued existence.

Shareholders representing 99.96 percent of the shares which were voted were in favor of the controversial restructuring proposal, while just 0.04 percent were against, Noble said in a filing to SGX after the market close on Monday.

The “proposed restructuring provides a stable platform for New Noble with a sustainable capital structure to deliver long-term value to all of its stakeholders,” Noble said in a presentation for the meeting.

Noble was in default of its debt obligations, with an aggregate value of US$3.45 billion, and without the restructuring would have been required to seek insolvency protection, leaving no value for shareholders, the presentation said.

Noble Chairman Paul Brough had previously warned in two separate recent letters to stakeholders, which were filed to the SGX, that if the proposed restructuring wasn’t completed, shareholders would get nothing as the company would need to seek formal insolvency or bankruptcy.

But shareholders had protested the plan, spurring modifications that were more favorable to equity holders.

Major shareholder Goldilocks, which holds around 8.1 percent of Noble’s equity, finally dropped its objections and legal filings in June, after Noble raised the portion of “New Noble,” the entity that will emerge after the restructuring proceeds, to be given to equity holders to 20 percent from 15 percent previously. Goldilocks will be entitled to nominate a director to the new entity’s board of directors as part of that deal.

Noble noted that binding restructuring support agreement (RSA) from existing senior creditors were more than 86 percent, surpassing the 75 percent approval threshold.

To some, the restructuring remained controversial.

Arnaud Vagner, a former Noble employee who had launched repeated broadsides against the company over a period of years under the name Iceberg Research, appeared to remain steadfast in his criticism.

“Even if the vote is positive, which is expected, this will not stop securities holders (existing and those who have already sold) from suing the individuals and organisations responsible,” he said in an email before the results were released. “A few law firms are working on these actions at the moment and we will make announcements soon. We also expect the scheme of arrangement to be challenged at the court.”

In a separate proposal considered at the meeting, Noble said that shareholders approved, by 99.98 percent to 0.02 percent the disposal of two wholly owned Kamsarmax dry bulk carrier vessels for US$47 million, payable in cash on completion. The net proceeds, following the repayment of bank loans associated with the vessels and other costs, will be around US$16 million, it said.

Noble’s shares were halted on Monday before the market open; Noble requested the halt be lifted before the market open on Tuesday.

This article was originally published on Tuesday, 28 August 2018 at 7:19 A.M. SGT; it has since been updated with the lifting of the trading halt. 

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