Noble Group Ltd (來寶集團), the commodity trader battling to survive, warned that it is to report another vast loss, including from the operations meant to sustain a revamped business, and while it signaled progress in debt restructuring talks, hurdles to a deal remain.
The Hong Kong-based company is to report a net loss of US$1.73 billion to US$1.93 billion for the final quarter of last year, potentially bringing last year’s losses to almost US$5 billion, it said in a statement early yesterday.
That meant it had a negative net-asset position of US$650 million to US$850 million on Dec. 31 last year.
Photo: Reuters
Noble Group announced an initial deal to restructure US$3.5 billion in debt last month, fending off bankruptcy after a three-year crisis marked by losses, write-downs and controversial accounting.
Since that debt-for-equity plan was unveiled, the proposal has drawn fire from a top shareholder as well as some bondholders.
With the company now entering a critical phase of negotiations with creditors to nail down the rescue, it said talks are productive and signaled that more than half of its senior creditors might be willing to endorse the deal.
The expected fourth-quarter loss “results in a negative net-asset position,” it said. “However, the board believes that the proposed restructuring, once implemented, should restore shareholders’ equity and create a sustainable capital structure, which would allow the group to rebuild its business in Asia.”
As part of the proposed deal, Noble Group has reached an in-principle agreement with an ad hoc creditors’ group and ING Groep NV, as a fronting bank, for a three-year US$700 million finance facility, which is to be made available when the restructuring is effective, it said in the statement.
The 2022 notes gained US$0.004 to US$0.492 at 11am in Singapore, according to Bloomberg-compiled prices.
In the past two weeks, the bonds lost almost US$0.02 amid opposition to the debt plan by some investors. The shares rose as much as 7.1 percent, and were 2 percent higher.
For the full year, the net loss is seen between US$4.78 billion and US$4.98 billion.
Of the expected loss for the fourth quarter, US$50 million to US$100 million was made on continuing operations in hard commodities, freight and liquefied natural gas, and a further US$225 million to US$275 million was in businesses it has sold, the company said, adding that there was a further exceptional loss of US$1.45 billion to US$1.55 billion, including non-cash mark-to-market losses on derivatives positions.
Under the rescue plan, which has been backed by about one-third of the creditors in the ad hoc group, about half of the debt would be switched into new equity. All existing shareholders would get a 10 percent stake in the revamped company. Separately, perpetual bondholders are being offered a few cents on the dollar.
Noble Group said the ad hoc group controls 36 percent of its senior debt — obligations that include bonds due this year and in 2020 and 2022, as well as credit facilities.
In addition, that group’s advisors are in talks with holders of a further 15 percent of the debt, who have indicated “broad support” for a deal, the company said.
Given talks with creditors and finance provided by its banks, “the board is, on balance and on the basis of legal advice, satisfied that the group can continue as a going concern, until such time as the restructuring is completed,” the company said.
Full-year results are due on Wednesday next week.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last