Noble Group secures trade finance lines as part of restructuring
Troubled commodity trader Noble Group has secured US$100mn in committed trade finance facilities from a consortium of investors.
The funding will provide capacity for Noble to expand its trade flows, particularly in the LNG sector.
The investors include Value Partners and Pinpoint Asset Management. The consortium has a 5% holding in the Singapore-based trader. It comes as part of a US$3.4bn debt restructuring plan which will see existing Noble shareholders take a 20% equity stake in the company.
The restructuring will also see a new joint venture established with ADCM Resources, a parent company of Goldilocks Investment, a Noble shareholder, to focus on commodity trading in the Middle East.
In return for the trade finance facility, the investors will receive access to various Noble bonds, as well as an arrangement fee of US$5mn.
Noble Group reported a US$72mn loss in the first quarter of the year, and has lost more than 90% of its stock value since 2015, when a little-known company named Iceberg Research published a note comparing Noble’s accounting practices to fallen US energy company Enron.
Iceberg accused Noble of “exploiting the accounting treatment of its associates to avoid large impairments and fabricate profit”.
Since then, the company has been in freefall. Where it was once valued at US$11bn and considered a formidable force in global commodity trade, it is now worth just US$110mn.
Noble has been through numerous corporate and debt restructurings, and has sold off some of its most valuable assets.
In March, a debt restructuring agreement also saw the group provided with an additional three-year US$600mn trade finance package and a US$100mn hedging facility, fully underwritten by creditors including Deutsche Bank.
Among the assets that Noble has sold is its North American energy distribution unit to US firm Calpine in 2016, six months after selling its agri trading arm to Chinese conglomerate Cofco.
Paul Brough, the company chairman, says the restructuring will allow Noble to “preserve and protect value for all stakeholders”.
He adds: “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 Noble to return to business as usual, with a well-capitalised balance sheet and important tools of the trade in place for its future success.”take me back