Deutsche Bank Bids For Noble Group Debt -- WSJ
August 18 2018 - 3:02AM
Dow Jones News
By Saurabh Chaturvedi and Manju Dalal
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 18, 2018).
Deutsche Bank has launched an unexpected offer to buy bonds of
Singapore-listed commodity trader Noble Group Ltd., days before a
shareholder vote on a $3.5 billion restructuring.
The embattled Noble has been pursuing the restructuring for
months as it seeks to stay afloat, address a liquidity crunch and
in due course provide a return to shareholders who have watched the
company's market value decline to about $110 million from a peak of
more than $11 billion in 2011.
It wasn't immediately clear if Deutsche Bank was acting on
behalf of another company or for itself, although banks typically
handle bond tenders like this for clients. The potential impact on
the reorganization was also unclear, since if bondholders who have
already signed up for the restructuring sell their holdings, the
new buyer would still be obliged to back the plan.
"The offer has surprised everyone," said Sandra Chow, head of
Asian research at CreditSights in Singapore. "It could be from
someone trying to scuttle the restructuring process or may even be
from someone who wants to take control of Noble's assets at a
cheaper price."
According to the notice sent to Noble's bondholders by Deutsche
Bank's London branch, the offer started on Wednesday and gives
investors until Aug. 24 to tender their bonds.
The offer covers roughly two-thirds of the debt under
restructuring, or $2.34 billion of three separate bonds issued by
Noble that are due in 2018, 2020 and 2022. The minimum purchase
price is 45 cents on the dollar, according to the notice, which was
reviewed by The Wall Street Journal. These bonds recently traded
between 46 and 48 cents on the dollar, according to Thomson
Reuters.
Deutsche Bank, which declined to comment, is a creditor to Noble
and has agreed to provide trade finance facilities to the company
under its restructuring. Noble didn't respond to a request for
comment.
The offer comes after Noble had already secured the support of
86% of noteholders -- much higher than the minimum 75% it needed.
The company needs more than half of shareholders to approve the
restructuring at a meeting on Aug. 27. Deutsche Bank is expected to
announce the result of its bond offer Aug. 28.
About 30% of Noble's shareholders, including the company's
founder Richard Elman and Abu Dhabi-based Goldilocks Investment Co.
have already backed the restructuring.
In the past, there have been reports about Chinese interest in
Noble. But no deal could be reached, especially as Noble has been
battered by accusations of accounting irregularities, first leveled
in early 2015 by a then-anonymous blogger known as Iceberg
Research. The firm has denied the allegations.
Since announcing its restructuring plans in January, Noble has
twice sweetened the deal for shareholders. In June, Noble said
shareholders would get 20% of the equity in the new group, up from
the 15% offered earlier. Creditors will get a 70% stake, while 10%
will go to management.
Write to Saurabh Chaturvedi at Saurabh.Chaturvedi@wsj.com and
Manju Dalal at manju.dalal@wsj.com
(END) Dow Jones Newswires
August 18, 2018 02:47 ET (06:47 GMT)
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