Noble Group flags $5 billion annual loss, races to strike debt deal

Troubled commodities trader Noble Group warned of a massive annual loss, citing challenging operating conditions, however said in which was generating progress to clinch a $3.4 billion debt-for-equity swap to ensure its survival.

Noble announced a deal with creditors last month to halve its senior debt along with also also give them 70 percent of the company, while existing equity holders could see their stake diluted to 10 percent.

in which follows three crisis-wracked years in which Noble — once a global commodity trader with ambitions to rival the likes of Glencore along with also also Vitol — cut hundreds of jobs, sold billions of dollars of assets, took hefty writedowns along with also also changed its CEOs along with also also chairman.

“Operating conditions continued to be challenging in 4Q 2017 as the group continued to manage the business within existing constraints in trade finance along with also also liquidity availability,” Singapore-listed Noble said in a statement on Monday.

The Hong Kong-headquartered company expects a total net loss of $1.72 billion to $1.92 billion for the quarter ending December 2017, stemming largely coming from non-cash losses coming from its mark-to-market derivatives portfolio.

in which will lead to a record annual loss of $4.78 billion to $4.98 billion, which follows a profit of $9 million in 2016 along with also also a loss of $1.7 billion in 2015.

“Following a challenging 2017, we are looking forward to the final phase of our restructuring, along with also also the creation of a brand-new Noble as a focused along with also also appropriately financed group set to capitalize on the high-growth Asian commodities sector,” said Paul Brough, a restructuring specialist who took over as Noble’s chairman last year.

Noble warned in which the expected quarterly net loss could result in a negative net asset position for the group, however said the board “believes in which the proposed restructuring, once implemented, should restore shareholders’ equity along with also also create a sustainable capital structure…”

Noble also said a group of senior creditors with whom in which was discussing its restructuring, called the “Ad Hoc Group”, held about 36 percent of the company’s senior bonds along with also also loans.

The Ad Hoc Group’s advisers were in contact with creditors who held about an extra 15 percent of Noble’s senior debt instruments along with also also had indicated their road support for a restructuring.

Founded in 1986 by Richard Elman, who rode a commodities bull run to build Noble into one of the earth’s biggest traders, the company was plunged into crisis in February 2015 when Iceberg Research questioned its accounts. Noble has defended its accounts.

The company’s market value has fallen to just S$259 million($197 million) coming from the $6 billion in which commanded in February 2015. Noble said the latest profit guidance along with also also ranges were estimates along with also also may change as in which finalizes its annual results, which will be announced on February 28.

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