Value Investing

Noble Debt Is Worth?

The author of this article has a short position in Noble group

You see the old and poor man in the banking mile wandering daily… he has a richer wallet than Noble Group.

Currently the trader is worth Minus -$US900M. Which is about the equity+the perpetuals value. The 70% $ US3.5B debt-for-equity Swap would still leave a company of minus $US450-500M equity…

Zero or less than one-fourth of 1 percent (from 2014) will be left to the Noble existing equity shareholders and less than 3% to perpetual holders.

“The Paper for Paper Plan”

If the bondholders say YES, they get coupon paymentsin-kind, Interest to be pay-if-you-can or at the option of the Noble management. Thus Noble instead of cash value, is proposing to pay the paper with more paper.

If the bondholders say NO, they can aspire to a recovery of between 45-55c on the dollar, cash. Bonds are actually a little above that.

The deal is an ASYMMETRY for the management.

  • If the company (that they bankrupted) ‘goes into liquidation’, they pocketed fees, going away with millions in salaries & bonuses.
  • If the company does not go in liquidation, the failed management and its failed VPs also end up winning a 20% stake in the reformed entity, are absolved from criminal prosecutions perpetuating the siphoning with the next-to-become-losers…

To sum up they win, you lose.

the Noble Files 高贵组文件 研究

高贵组文件 研究