Noble group and shareholder Goldilocks seem to have buried the hatchet over the terms of a $3.5bn restructuring of the troubled commodity trader. Noble’s shares surged as much as 57% following a two-day trading halt after it said Abu Dhabi-based Goldilocks Investment would support the revised proposal that sweetened the restructuring plan.
In a major step to ensure its survival, the commodities firm has raised the amount of equity that shareholders would hold in the newly restructured firm to 20% from 15% proposed previously. The remaining 10% will be held by management.
The move was enough to convince Goldilocks, which holds 8.1% of Noble, to give the go ahead. The key shareholder was against the original restructuring plan and even filed lawsuits against Noble, arguing that the plan protected creditors at the expense of shareholders.
Goldilocks will be entitled to nominate one person to the board of directors of the restructured firm. The remaining equity in New Noble, the slimmed down entity that will result from the restructuring, will be 70% held by the senior creditor special purpose vehicle (SPV), and 10% by the management SPV.
A critical deal
The deal is critical for a company that has sold billions of dollars of assets, taken writedowns and cut hundreds of jobs over the past three years. Noble was plunged into crisis in February 2015 when Iceberg Research questioned its books. However, Noble stands by its accounting.
“Today we are proud to have been part of Noble’s effort towards the completion of its restructuring that endeavors to create a sustainable balance between the interests of the shareholders and the future of Noble,” Ajit Joshi, Goldilocks director and fund manager, said in a statement.
Paul Brough, chairman of Noble said: “We are pleased to have secured Goldilocks’ support for the restructuring. The strategic partnership agreement announced today will create real opportunities for New Noble in the Middle East.”
Noble and Goldilocks’ parent company, Abu Dhabi Financial Group (ADFG), plan to work together to expand the group’s presence in the Middle East. ADFG has assets under management of more than U$6 billion and offices across the Middle East, the UK, and Eastern Europe.