Noble Group is talking to creditors about a conventional restructuring that includes a debt-for-equity swap, Bloomberg reported on Tuesday.
After talks in Hong Kong last week, the commodities trader is expecting a proposal from its creditors to restructure $3.5 billion in debt that would include a major debt-for-equity element, the report said citing people familiar with the talks.
Depending on its size, the debt-for-equity swap could wipe out a significant portion of the shareholdings of current investors, the report said.
Noble and its creditors have yet to agree on how much the current shareholders would retain in the new company, and how much would be controlled by management as part of an incentive package, according to the report.
Shares in the embattled commodities trader Noble Group jumped as much as 26 percent to S$0.24 on the Singapore Exchange. The trader's market capitalization, which once topped $10 billion, has shrunk to $180 million.
