Embattled commodity trader Noble Group Ltd. is on track to complete its mammoth restructuring deal after a Bermuda court approved an officer to carry out the plan, using a local kind of insolvency process.
In a brief court hearing Friday, the judge called the company insolvent and allowed a court-appointed officer to oversee the restructuring.
The green light from the Bermuda court will allow Noble to avoid liquidation after its preferred restructuring plan was scuppered at the last moment by an investigation from Singaporean regulators. It means that Noble could emerge from restructuring as soon as this week after more than a year of hard-fought negotiations over its $3.5 billion debt pile.
The Bermuda court process represents a Plan B for Noble and its creditors. They had hoped to avoid a formal insolvency process, which Noble has previously warned could hurt its contractual relations with counterparties.
But Noble's plan for a consensual debt deal, which involved relisting the company in Singapore, was blocked earlier this month by regulators. Singaporean authorities said the trader wouldn't be allowed to list as a new entity and announced an investigation into its finances.
The judge asked whether new Noble would ever be listed on any exchange. Christian Luthi, an attorney for Noble at Conyers Dill & Pearman, said there are no plans to do so.
Still, the decision represents a light at the end of the tunnel for Noble and its creditors. The company said that it anticipated the company's restructuring would become effective Wednesday.
The company was thrown into turmoil late last month after a trio of Singaporean authorities announced a probe for "suspected false and misleading statements." Noble's accounting had been in focus since early 2015, when a previously unknown group called Iceberg Research first criticized its practices.
As part of the investigation, the Monetary Authority of Singapore is looking into whether officers of Noble Group and Noble Resources International Pte Ltd. played a role in any breaches of the law. Authorities also said in late November that they had expanded their investigation to Noble's longstanding auditor, Ernst & Young LLP.
-- Information for this article was contributed by Jack Farchy and Krystal Chia of Bloomberg News.
SundayMonday Business on 12/16/2018