SINGAPORE (Reuters) – Noble Group (NOBG.SI) said on Friday it will seek changes to its original debt restructuring plan, with the spotlight now moving toward what the once mighty commodity merchant has called the alternative: insolvency protection.

In an unusually strong move, Singapore on Thursday issued a joint statement by police, the Monetary Authority of Singapore (MAS), and Singapore Exchange regulators that barred Noble from re-listing on the local bourse, which was part of its end-game strategy in a controversial $3.5 billion debt-for-equity re-structuring plan.

The statement by Singapore authorities cited the start of an investigation into Noble for potential improper accounting.

The commodity trader, which saw virtually all its stock market value wiped out before trading was suspended on SGX in November, said it had consulted its creditors and would take steps to implement the restructuring by an “alternative process”, which may involve a court-appointed officer.

GRAPHIC: 1997 to 2018: The rise and fall of Noble Group – tmsnrt.rs/2PEZb2j

PLAN B?

Noble, Asia’s biggest commodity trader at one time, said Singapore’s block to re-listing was a “very disappointing development” and said it plans to restructure in forms other than by re-listing in Singapore.

Noble did not specifically say on Friday it would seek insolvency protection, but the company has openly warned this year that if its $3.5 billion restructuring plan fails, it would begin insolvency proceedings, likely in Britain.

“Plan B is bad for shareholders and perpetual bond holders as there is no listed entity that they can hang their already thin hopes on,” said Mak Yuen Teen, an associate professor of accounting at the NUS Business School.

The re-structuring deal itself, one of the most complex negotiated in recent years, has been highly controversial, but it saved Noble from near-certain collapse.

Noble’s troubles began after Iceberg Research questioned its accounts in February 2015. To save itself, Noble has sold billions of dollars of assets, including its core businesses, taken hefty writedowns and cut hundreds of jobs, while defending its accounting. The trader had a market value of $6 billion nearly four years ago.

Under the proposed debt-for-equity deal, Noble’s debt would be halved. In return, Noble’s creditors, made up mostly of hedge funds, would own 70 percent of the restructured business, while existing shareholders’ equity would be reduced to 20 percent and Noble’s management would get 10 percent.

Dubbed “New Noble”, the company wanted to transform itself into an Asia-focused coal-trading business. It was looking to list the overhauled business as part of the restructuring.

Singapore’s regulator and authorities, though, took the decision to block Noble’s deal after reviewing the findings of a probe, concluding that “there are significant uncertainties about the financial position of New Noble”.

Mak said the authorities’ move was “unprecedented” but added that there also had never been case as complicated as Noble’s, “where a restructuring with the proposed listing of a new entity happens with such serious regulatory issues hanging around it.”

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