SINGAPORE (June 14): Shares of Noble Group, the commodity trader battling for survival, slumped to a record low as efforts to get shareholder agreement on a controversial US$3.5 billion ($4.7 billion) debt restructuring deal take longer than expected.

The stock traded at 5.2 cents on Thursday, for a loss of 74% this year, after touching an all-time intraday low of 5 cents a day earlier. Once Asia’s largest commodity trader, the company has seen its market value shrink to about US$50 million from more than US$10 billion in 2010.

After three years of crisis featuring billions of dollars in losses, lawsuits and recently a spate of public sparring with shareholder Goldilocks Investment Co., the trader is trying to secure a do-or-die deal that will swap half the debt for equity and hand control to creditors. The company’s original plan was to complete the restructuring by July, but that’s looking increasingly difficult.

“If there was ever an example of bearish investor sentiment, this is it,” CMC Markets sales trader Oriano Lizza said by email. “The company has strung along investors for far too long. This now seems like the final straw. Investors cannot see a way out and are heading for the hills.”

Noble Group declined to comment, and an email and calls to an external representative of the creditor group were not immediately answered.

While the plan has been backed by senior creditors, as well as founder and largest shareholder Richard Elman, it’s run into fierce opposition from Abu Dhabi-based fund Goldilocks. The investor has sued the trader, as well as the banks and hedge funds backing the proposal, to halt the restructuring.

Independent Adviser
To get the deal over the line, Chairman Paul Brough needs approvals from shareholders as well as creditors. The company -- which says some 85% of senior creditors back the plan -- is working on a circular to send to stock holders, ahead of a special general meeting that’s yet to be scheduled.

The trader hired Provenance Capital as an independent adviser to assess whether the proposed restructuring is fair, complying with a request from the Singapore regulator after the deal ran into opposition. Provenance’s view needs to be included in the circular on the deal that’s sent to holders.

Brough told analysts during the first quarter earnings call that he would be “quite happy” if the company could issue the circular by the end of May.

The company’s trading operations have been racking up losses as the restructuring talks continue. It lost US$71.5 million in the three months through March as revenue sank almost 40% from a year earlier to US$1.2 billion. That follows a full-year shortfall of almost US$5 billion in 2017.

Noble Group’s defaulted debt was little changed on Thursday. The 2018 dollar bonds were trading at 38.9 cents and the 2022 notes at 40.1 cents, according to Bloomberg-compiled prices.