A few anonymous investors has filed on June 19 a petition to the International Swaps & Derivatives Association on whether the two billion dollar loan extension secured by Nobel Group Limited can be termed a restructuring credit event. The latter company is headquartered in Hong Kong and the loan extension has been granted by banks. Nobel Group was at one time Asia's frontline commodity trader.
The petition by the anonymous party has sent to determinations committee. The latter is expected to consider this query. If it succeeds in its intentions, it means that payouts will be enjoyed by credit default swaps holders on company debt value amounting to nearly five billion. Questions sent to a representative acting for the Noble Group remained unanswered. Investors have noted that the company has earlier deferred payment of coupon on its $400 million worth of perpetual securities due June 26.
Noble Group Limited has been engaged in talks over many weeks concerning its facility. The latter underpins the company's oil business all over the world. It is all set to expire during the latter part of June. A preliminary agreement was reached by the commodity trader with its banks for the facility extension for a period of 120 days at a little under the present two billion dollar limit.
This extension provides a fillip to the attempts of the Nobel Group to find fresh investors, close down unprofitable businesses or sell its assets. It also helped that the company has a new chairman-Paul Brough- heading its operations. Brough is a restructuring specialist. He has worked on a number of complex projects like liquidating Lehman Brothers Holdings Inc among others. Nobel Group has appointed two investment banks- Moelis & Co, and Morgan Stanley to review the available options.
The Noble Group continues to remain under extreme pressure. The company has suffered a number of choppy years. Those periods were pock marked with losses and downgrades in its credit rating. There were also accusations that the company has engaged in improper accounting practices. The Noble Group has vehemently denied such allegations. The market capitalization of the once thriving commodity trader based out of Hong Kong has dipped in excess of $10 billion. It has now slid to only $300 million in 2017. The Standard & Poor Global Ratings have warned investors in May that the company could default on its borrowings in 2017 or 2018.