(Aug 27): Embattled commodity trader Noble Group took a significant step toward getting its US$3.5 billion ($4.8 billion) debt-for-equity restructuring over the line after shareholders voted to back the controversial proposal at a special general meeting in Singapore.

The plan was approved by 99.96% of votes cast, according to figures from the company displayed at the meeting. Before the gathering, the trader had said about a third of its shareholders, including founder Richard Elman, were already committed to supporting the rescue.

The vote will enable Noble to press on with the deal’s final stages, and could allow it to move beyond years of crisis that’ve been marked by a default, billions in losses, and criticism of its accounts, which it’s rejected. The plan had been the subject of a heated dispute between Chairman Paul Brough and shareholder Goldilocks Investment Co. before its terms were amended and the two forged an agreement after facing off in court. The trader still faces opposition from foe Iceberg Research, which wants to halt the proposal.

“We are now moving into the final phase of the restructuring,” Brough told investors before the vote. The board has fulfilled a commitment to avoid insolvency, said Brough, a restructuring specialist who previously worked on the liquidation of Lehman Brothers’ assets in Asia. In the case of insolvency at Noble, there’d be “no proceeds left for shareholders, big or small,” he said.

‘Near-Death’ Experience
The restructuring had been arduous and expensive, according to Brough, who said while the trader now has good prospects, it came close to collapse last year. Last summer, there was “near-death” experience when Brough thought the company had been just a phone call away from insolvency, he said.

Under the plan endorsed by shareholders, 70% of the equity in a new company will go to senior creditors, 10 percent to management, and the remainder will be held by existing stockholders. The debt burden will be halved. To survive the crisis, the company has sold off assets in a retreat to its Asian roots that leaves it focused on coal, liquefied natural gas and freight.

There are more steps to come before the deal is effective including a formal green light from senior creditors, and approval from the courts for the revamp. The first of those appears to be a given as Noble has said more than 86 percent of senior creditors already back the rescue. The company has said it’s aiming for completion by year-end, a delay from the original goal of July.

Critic Iceberg Research, led by former Noble employee Arnaud Vagner, is planning to press on with the fight. Vagner is trying to organise a fresh legal challenge to the restructuring, and said last week the effort was making “good progress.” On Monday, Iceberg said: “A few law firms are working on these actions at the moment and we will make announcements soon.”

In the run-up to the SGM, the trader said top shareholder Elman won’t take up his position as an executive director in the new company for personal reasons.

Noble Group shares were suspended on Monday, pending an announcement. They last traded at 14.9 cents, and have declined more than 60 percent over the past 12 months, cutting the trader’s market value to US$145 million. At its height, Noble Group’s capitalisation topped US$10 billion.

At the SGM, Brough signalled he’ll be moving on. “Once this restructuring is completed, we need a chairman with deep industry knowledge,” he said in response to a shareholder’s question. The company expects to announce a new chairman and a new board before the restructuring is completed, he said.