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Noble Group strikes in-principle deal for debt restructuring

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LNG Industry,

Noble Group has reached an in-principle agreement with a group of senior creditors for a restructuring of its debt, as reported by Reuters.

The in-principle agreement was reached with an ad hoc group of creditors representing about 30% of its senior debt instruments, and will reduce Noble’s existing senior debt instruments to US$1.7 billion from US$3.4 billion.

The agreement proposes a debt-to-equity swap which, along with the issuance of equity to retain and incentivise the management team, is expected to result in dilution of existing shareholders’ interest in the group, Noble said.

In a statement the company also said that existing shareholders will hold 10% of the ordinary share capital in the company once the proposed restructuring is completed.

The proposed restructuring includes a three-year committed trade finance and hedging facility of up to US$700 million for the company’s commodities trading businesses, it said.

Noble has endured a torrid three years which have forced it to shrink to its Asian roots as a hard commodities player, slash jobs and sell its key assets - some at losses - to cut debt.

Founder Richard Elman is the company’s biggest shareholder with a stake of just over 18%. Other large investors include sovereign wealth fund China Investment Corp, Orbis Investment Management and Eastspring Investments.

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