SINGAPORE (Aug 20): Richard Elman, the founder of Noble Group, will not take up the position as an executive director of the embattled commodities trader after its restructuring.
Elman’s decision not to take up the position as previously announced was due to personal reasons, said the company in a stock exchange filing on Monday, and comes days ahead of a crucial shareholder vote on its planned US$3.5 billion ($4.8 billion) restructuring.
“The company and the board would like to thank Mr. Elman and acknowledge his immense contribution in founding and leading the company which during its history became the largest commodities company in Asia, a platform for the careers of thousands of people in the industry, and a Fortune 500 company,” said Noble in its filing.
Further details on the members of the board of New Noble would be announced once identified and finalised, added Noble.
Noble has been pursuing a 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 Noble’s market value decline to about US$110 million from a peak of more than US$11 billion in 2011 partially on declines in commodities prices.
In the quarter ended June, Noble posted a net loss of US$128.3 million. This included US$94.6 million in restructuring expenses and US$74.3 million in net financing and tax.
In a separate development, Deutsche Bank on Saturday confirmed it was acting on its own to buy bonds of Noble.
“Deutsche Bank expects the tender process to increase the already high level of support for the restructuring, as any bonds acquired by the bank will be automatically committed to the restructuring,” said Sarah Stabler, vice president, communications at Deutsche Bank in Singapore, reported Dow Jones Newswires.
Noble had already secured the support of 86% of creditors, much higher than the minimum 75% it needed for the restructuring. The company needs more than half of shareholders to approve the revamp at a meeting on Aug 27.
Deutsche Bank’s offer could add more supporters to the restructuring plan, said The Wall Street Journal. The bank would also benefit as it will gain a higher share in the restructured entity with its higher bondholding being acquired at much lower costs.
The minimum purchase price is 45 cents on the dollar. The bonds recently traded between 46 and 48 cents on the dollar.
Noble’s bondholders have until Aug 24 to accept the offer.
Deutsche Bank's offer covers roughly two-thirds of the debt under restructuring, or US$2.34 billion of three separate bonds issued by Noble that are due in 2018, 2020 and 2022.