SINGAPORE -- The future of Noble Group, once Asia's biggest commodities trader, hangs in the balance as the debt-laden company scrambles to devise an alternative restructuring plan by Tuesday's deadline in a bid to ensure its survival.
Singapore regulators last week dealt a severe blow to the group by barring Noble from relisting its shares, a key element in its $3.5 billion debt-for-equity swap that aims to transform the company into a coal-trading business.
Once valued at more than $10 billion, Noble has been brought low by the global commodities slump and allegations of accounting irregularities in 2015. The allegations triggered a severe crisis of confidence in the commodities trader once dubbed a "mini-Glencore," in reference to the Anglo-Swiss commodities giant.
Despite selling prized businesses and after hefty write-downs, the group has struggled to retain the confidence of creditors, prompting the start of debt restructuring talks earlier this year.
However, last week the Singapore Exchange, where Hong Kong-based Noble is quoted, and other local regulators said they would not allow the company to be relisted because they had found "significant uncertainties" regarding the financial position of the restructured company.
Noble will now have to win creditor support to again push back the deadline for approval of the restructuring -- an extremely complicated process that thus far has taken months to devise.
The deadline for restructuring was originally set for Nov. 27, but the company postponed it two weeks to Dec. 11 after investigations by Singaporean authorities over suspected false and misleading statements by the trading house. Noble can push back the deadline to any day until Dec. 31 as long as its creditors approve.
Analysts said failure to win a new delay could prove fatal for the company. "If Noble does not find an alternative solution to a listing in Singapore, then a liquidation cannot be ruled out," Brayan Lai, an analyst at Hong Kong-based credit researcher Bondcritic told the Nikkei Asian Review. Lai added that "It does not look like Noble will be allowed to list in Singapore in the near future pending the outcome of the investigations."
One option could be to seek bankruptcy protection. Last Friday, the company said that it "may implement the restructuring through a court-appointed officer," adding that board members intended to "preserve value for all stakeholders."
Noble earlier this year indicated that it was likely to file for protection if restructuring failed and if the company lost creditor support.
Noble, which was named for the international best-seller about an Asian trading house modelled on Hong Kong's Jardines, was founded in 1986. Dealing in coal, metals, and other commodities, the company became one of Asia's leading traders, with net profit peaking at about $600 million in 2010 and its market capitalization topping $14 billion Singapore dollars ($10 billion) in 2011.
But the company has fallen on hard times since 2015. Its share price fell dramatically after research company Iceberg Research accused Noble of accounting irregularities in early 2015.
In 2017, the company recorded a net loss of $4.9 billion. Net assets fell to negative $1 billion at the end of June, while its market capitalization shrank to SG$107 million ($78 million). Trade in its stock was suspended in mid-November in accordance with the restructuring plan.
Under the plan, Noble's creditors would acquire 70% of the business, while existing shareholders' equity would be reduced to 20% and Noble's management would receive 10%.
Noble is looking to transform into an Asia-focused coal-trading business through restructuring.