June 6 Noble Group's main banks are in talks to
decide whether to give the commodity trader an extension on its
credit line or force it into a restructuring or liquidation, the
Financial Times newspaper said on Tuesday, citing sources with
knowledge of the discussions.
Banks including HSBC, Societe Generale,
ABN Amro, Citigroup and ING, have
appointed legal advisers to consider the case for extending the
$2 billion line of credit, "so the Hong Kong-based company can
continue its lengthy search for a major new investor to
recapitalise the business", the FT said.
Law firm Clifford Chance has been appointed by Noble's
lenders to advise on whether bankruptcy or liquidation would
give them the best means of recouping the borrowing provided to
Noble if the credit line is not extended, the paper said.
Banks have also hired consultants Alvarez & Marsal, who are
assessing the collateral pledged by Noble against the credit
line, FT said.
The struggling commodity trader is asking banks to extend
the credit line until the end of the year while it looks for a
Citigroup, ING and Noble Group declined to comment. HSBC,
Societe Generale and ABN Amro did not immediately respond to
requests for comment outside regular business hours.
"I think it is likely that (Noble) will get some extension
(to the credit line) but it all depends on how much the lenders
believe in the credibility of management and its plans," an
executive at one of Noble’s lenders was quoted as telling the
Noble has struggled ever since Iceberg Research questioned
its accounts in early 2015, which came at a time of a brutal
downturn in commodity markets. The company has stood by its
But the share price collapsed and credit rating downgrades,
management upheavals and a series of writedowns, asset sales and
a fundraising ensued.
Earlier this year the company reported it made a net profit
of just $8.7 million in 2016, following a net loss of $1.67
billion in 2015, its first loss in nearly two decades.
Noble's market value has shrunk to $354 million currently
from $6 billion in February 2015.
(Reporting by Sangameswaran S in Bengaluru; Editing by Greg