SINGAPORE (Feb 12): Commodities trader Noble Group’s plans to improve its balance sheet have come under a barrage of criticism. One major shareholder, Goldilocks Investment, has written a letter to the Singapore Exchange. Those who hold the company’s perpetuals have voiced unhappiness that they will receive less than 4% of the face value of their investment. And Iceberg Research, an online outfit that has heavily criticised Noble, has urged creditors to reject Noble’s restructuring plan.

The negative reception is to be expected. Noble’s deal, announced on Jan 29, allows an “ad hoc group” of senior creditors that holds US$3.4 billion ($4.5 billion) of its debt obligations to swap their debt for a combination of new debt instruments and equity in a restructured company. The arrangement will substantially dilute existing shareholders. In addition, Noble intends to offer up to US$15 million in aggregate to those who hold its US$400 million in perpetuals.

Noble’s plan requires regulatory and shareholder approval, so the company may be in need of a charm offensive. It has already issued two rebuttals to the allegations raised by Goldilocks. And the company recently met with representatives from the Securities Investors Association of Singapore (SIAS). Will it get the approvals it needs? Do shareholders and creditors have other viable options?

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