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From $11 billion trading titan to penny stock: Noble Group faces crunch as creditors, investors circle

Reuters  |  SINGAPORE 

By Anshuman and Gloystein

(Reuters) - Just seven years ago, was a $11 billion-plus Asian commodity powerhouse, trading everything from soybeans to As it readies its latest earnings report, it's worth barely $80 million, rooted among Singapore's penny stocks.

Due later on Tuesday, Noble's first-quarter results will shed light on whether it can stem huge losses provoked by a lack of trade financing and market calls that went sour - while whittling down a debt mountain. They also precede shareholder meetings and legal rulings that will decide whether it survives.

Amid accusations of levelled in 2015, and a legal spat this year, a long slide in investor confidence has seen most of Noble's market value wiped out. Noble has defended its accounting and is now trying to clinch a last-ditch deal with creditors and shareholders from which - if it succeeds - it will emerge a transformed company.

Noble is seeking approval to halve its $3.4 billion debt in return for handing over 70 percent of equity to senior creditors, mostly a group of hedge funds which calls itself the "Ad Hoc Group". Under that plan, its headquarters will be in London, not Asia, no longer controlled by founder

"Noble's restructuring...remains critical to averting bankruptcy," Singapore's said ahead of the Noble results.

The deal would leave existing shareholders with just 15 percent equity in a company that has seen its share price fall from a peak of S$17.6 dollar ($13.18) in 2011 to below S$0.1.

Despite its woes, Noble has so far defied talk of its demise. But to keep going, Noble needs a majority of its shareholders to approve the restructuring - a vote on the proposal is expected in June.

GOLDILOCKS, BEARS

Scared by the prospect of total loss and lack of any alternate plan, the proposal could get enough support, company sources say.

Founder Elman, still Noble's biggest shareholder with a stake of nearly 18 percent, would be given a board seat in the new firm.

Paul Brough, a restructuring and liquidation expert, has urged shareholders to support the deal, threatening a failure would result in insolvency and bankruptcy.

But leading the resistance is Abu Dhabi-based Goldilocks Investment Co. Ltd, which holds 8.1 percent in Noble. Goldilocks has filed complaints and lawsuits against the restructuring plans, arguing they protect creditors at the expense of shareholders.

Goldilocks is Noble's third-biggest shareholder after Elman and China Investment Corp, which has a 9.5 percent stake.

It's not just shareholders who are unhappy, though.

One of Noble's business partners, Indonesian coal PT Atlas Resources, has also filed lawsuit against Noble and its William James Randall, alleging it was given false information related to asset sales.

Shipping Indonesian coal to buyers in is the biggest remaining business at Noble, which has said it plans to resist any and all allegations or claims made against it.

'NIMBLE AND MOTIVATED'

In its glory days, Noble employed hundreds of traders, with ambitions to rival global rivals like

But with its market value a shadow of what it once was, and billions in debt, Noble has struggled to remain active. Instead of trading itself out of trouble, it was forced to sell off its core businesses, including and gas, to competitors and Mercuria.

This, as well as some bad trading calls, meant Noble booked a whopping $5 billion loss in 2017 - despite a broad commodity market recovery.

As a result, Noble was unable to join a share-price rally enjoyed by rival miners and traders like or

For now, Noble fights on, seeking to make the best of its new look.

Earlier in May, its gave a market presentation at a major coal trading event in at which it described itself as "small, but nimble and motivated".

($1 = 1.3352 dollars)

(Reporting by Anshuman and Gloystein; Editing by Kenneth Maxwell)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, May 15 2018. 14:46 IST
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