Goldilocks pushes for alternative Noble restructuring

Shareholders will 'lose everything' by supporting Noble's current restructuring plan, it said.

The slew of attacks from Goldilocks Investment Company against Noble Group isn't done yet. It shared initiatives from its alternative restructuring plan in response to chairman Paul Jeremy Brough's letter to stakeholders. "Shareholders will certainly lose everything by supporting the current restructuring plan," it said. 

Goldilocks laid out four "value-enhancing initiatives," the first of which involves replacing the current board with "experienced people who respect SGX rules, shareholders’ rights, and who are accountable in Singapore" and resuming negotiations with creditors. According to the fund, the new Noble board should revisit and resurrect all turnaround proposals ignored by Brough and develop additional turnaround proposals.

The other initiatives involve providing Noble with a working capital and trade finance. "A specific proposal is currently being developed that will be shared with all stakeholders," it said. The other proposal includes the review and assessment of Noble’s business plan and earnings potential "so as to confirm its true value."

"Goldilocks asserts that the Brough Letter is a self-serving attempt to justify: (a) the mismanagement of Noble and; (b) the sale of key assets at a gross undervalue under his stewardship. The Brough Letter ignores fundamentally critical real-world facts and is an academic treatise on the theoretical application of insolvency principles. Goldilocks and other shareholders will not be tricked by this. Nor will they succumb to Noble’s ongoing campaign to threaten and terrorize shareholders with bankruptcy proceedings," the fund added.

It said that Brough ignored that the current restructuring plan gives shareholders nothing as cash flows are "destined to go to creditors," that creditors stand to lose if the current restructuring plan is rejected, and that huge profits for creditors disappear in event of bankruptcy.

"Creditors’ only goal today appears to be to quickly push through the current plan so that they can 'trade out' of their debt and sell their equity in New Noble and thereby take substantial
profits at the expense of shareholders. There is no chance that they will be able to do this if contracts have been blown up through a UK administration or other insolvency process," it added.

Goldilocks concluded, "Brough is playing a major bluffing game with shareholders and he, and other board members, are breaching their duties by playing games with, and attempting to terrorize, shareholders. As an experienced liquidator, Brough knows that the creditors will be wiped out in any bankruptcy scenario."