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Wed 20 Jun 2018 11:46 AM

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Noble Group pens deal with Abu Dhabi Financial Group as part of restructuring

ADCM Resources Ltd, an affiliate of the Abu Dhabi Financial Group, will work with Noble to help expand its presence in the Middle East

Noble Group pens deal with Abu Dhabi Financial Group as part of restructuring
As part of the agreement, Noble entered into a strategic partnership agreement with ADCM Resources Ltd, an ADFG affiliate.

Shares of Noble Group rose more than 50 percent on Wednesday after the embattled commodities trader penned a deal with investor Goldilocks and announced a partnership with the Abu Dhabi Financial Group (ADFG) to explore Middle East opportunities.

Noble Group had previously been close to collapse due to the low commodity prices, a ratings downgrade and allegations of irregular accounting practices, reported a net loss of $5 billion despite having been forced to sell off assets and undertake a $3.5 billion debt restructuring which was opposed by Goldilocks Investment Co, one of its principal shareholders.

Goldilocks is affiliated to the ADFG.

On Monday, Noble suspended its shares on the Singapore Exchange as it conducted negotiations, which on Wednesday resulted in Goldilocks agreeing to a restructuring plan which raises shareholders’ from 15 to 20 percent, and allows Goldilocks to nominate a representative to Noble’s board of directors.

“Goldilocks has always had Noble’s interests at the vanguard of its thinking,” said Goldilocks director and fund manager Ajit Joshi. “A strong Noble and an even stronger new Noble go to the heart of our rationale to unlock shareholder value.”

Opportunities in the Middle East

As part of the agreement, Noble entered into a strategic partnership agreement with ADCM Resources Ltd, an ADFG affiliate.

Under the terms of the partnership agreement, ADCM will work with Noble on business development opportunities in the Middle East and provide access to its customer base and relationships in a bid to strengthen Noble’s client base.

ADCM will also work to introduce, develop, strengthen and maintain business connections with trading partners, and will help to identify and facilitate businesses opportunities that can help improve Noble’s two-way commodity flows, as well as assist Noble in capital formation and the financing of regional investment projects.

Additionally, the partnership – which will be for an initial period and can be extended for an additional four by mutual agreement – will see ADCM provide access to its facilities to Noble with a view towards reducing costs and expenses.

“We are proud to have been a part of Noble’s effort towards the completion of its restructuring that endeavours to create a sustainable balance between the interests of the shareholders and the future of Noble,” Joshi added. “We will collaborate with Noble and lend our support to open new doors; we will join hands in creating new opportunities in the Middle East, Goldilocks home market.”

Following the announcement that the agreement was reached, Noble shares rose as much as 57 percent in Singapore, even if the stock remains 60 percent lower than last year.

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