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Noble Group to Sting Shareholders Including CIC

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Noble was once Asia’s biggest commodity trader earning the name “mini-Glencore” by people in the industry. Noble now has another moniker, which will be revealed later in the story.

Noble Group Limited has reportedly reached a deal with creditors to restructure its US$ 3.5 billion in borrowings down to roughly US$ 1.7 billion, saving the debt-laden commodity trader from an ongoing three-year struggle that has brought it to the edge of bankruptcy. The company’s survival comes at the cost of its existing equity shareholders – including founder Richard Elman (18.3%), Goldilocks Investment Co. (owned by Abu Dhabi Financial Group at 8.1%), Prudential plc (9.9%) and the China Investment Corporation (9.6%) – who would see their collective stake reduced to a paltry 10% under the proposed debt-for-equity swap. Elman is being wiped down to 1.8% of the total shareholding. Perpetual bondholders would be even worse off, with a loss of 96.5% on their US$ 400 million investment.

Some Hedge Fund Support

A group of hedge funds representing some 30% of Noble’s current debt – namely Varde Partners Inc., Och-Ziff Capital Management LLC, Davidson Kempner Capital Management LLC, and Taconic Capital Advisors – has backed the arrangement, which would allow the Singapore-listed company to issue a US$ 700 million three-year trade finance facility supported by funds raised from the sale of its non-core oil and gas assets. These senior creditors will get 70% of the proposed restructured company. In addition to owning 70% of the newly-refurbished business, Noble’s creditors will also receive 2% of the face value of the debt they own as payment for their role in keeping the once-proud trader afloat, a 5% fee for underwriting the US$ 700 million trade facility, and US$ 180 million worth of preference shares in the unit controlling the company’s physical assets. Noble’s management team is being incentivized to back the deal with the promise of a 20% stake.

Noble’s remaining empire would thereafter be split into two entities: its primary trading operations centered around coal, freight, and liquid natural gas (LNG) in Asia, and a ring-fenced company responsible for overseeing its physical assets in Jamaica’s alumina industry and upstream energy investment vehicle Harbour Energy, Limited. Together, they are expected to generate between US$ 175 million and US$ 200 million in annual earnings before interest, tax, depreciation and amortization.

Fall From Grace

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PGGM Executed its Inaugural Cleared Securities Lending Trade

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Service providers are keen on getting more beneficial owners to participate in the cleared securities lending market. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Altitude Infrastructure Gets Financing on Haute-Garonne Network Project

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Altitude Infrastructure SAS inked a 25-year concession agreement and closed a debt financing package for the deployment and maintenance of an ultra-high-speed broadband network in Haute-Garonne. Haute-Garonne is a department in the south of France.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Guggenheim Partners Agrees to Acquire Millstein & Co.

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On July 11, 2018, Guggenheim Partners inked a deal to acquire New York-based Millstein & Co., L.P., an advisory firm formed by Jim Millstein. Millstein will become co-Chairman of Guggenheim’s securities business. Millstein & Co. will become part of Guggenheim Securities, the investment banking division of the company. Ronen Bojmel will lead the combined Guggenheim restructuring team.

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