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Noble gesture: owners urged to give up shares to save SA firm

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Shareholders of a 111-year-old Adelaide company are being asked to hand over their stake for nothing in order to keep the company’s “fine name and tradition” going and save the jobs of about 100 staff.

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A Noble & Son Ltd (Nobles) entered into voluntary administration on June 15 when its directors decided the company was unable to repay its debts and a restructure was urgently needed.

The Kilburn-based business provides lifting and rigging equipment, technical services and engineering design for a range of heavy industries including mining, oil and gas, construction, shipping, manufacturing and defence.

It has 11 locations across Australia.

James McPherson and Austin Taylor of Adelaide-based Meertens Chartered Accountants have been appointed administrators and say the company is insolvent.

Nobles chairman Ian Stirling addressed shareholders at a meeting last week to request they transfer their shares and to detail plans of a proposed bailout by E&A Limited – an investment company with 10 wholly-owned subsidiaries across the mining, resources, defence, water, energy and financial services industries.

Keswick-based E&A’s companies employ more than 1400 people and have historically retained business names through subsidiaries.

In a letter to shareholders dated June 28, Stirling said E&A’s suggested Deed of Company Arrangement (DOCA) was based on achieving a better return for creditors than liquidation of the company and would be presented to the next meeting of creditors on July 20.

“It is a key term of the proposal that EAL acquire all the shares and therefore the business of Nobles,” Stirling wrote in the letter seen by InDaily.

“We are fortunate to have the support of EAL who have demonstrated their commitment through funding the mid-June payroll and their proposal to ensure continuity of employment and the survival of the Nobles brand into the future.

“The DOCA does not provide for a return for shareholders, but neither would the alternative, being liquidation.”

Nobles administrators have asked shareholders to agree to the transfer of their shares by July 19, ahead of the next creditor meeting.

“The DOCA cannot be completed unless your shares are transferred as required under the E&A Limited proposal,” McPherson wrote in a letter to shareholders after the meeting last week.

“Further, if the shares are not transferred as required under the terms of the E&A Limited proposal, the company would then enter into liquidation upon a resolution being passed by the creditors or by order of the court.”

A Noble & Son Limited was founded in Adelaide in 1911 and has more than 100 staff.

With annual revenues around $45 million, the company has slid down the rankings in InDaily’s South Australian Business Index in recent years, falling  from 70 in 2019 to 79 in 2020 and 93 in 2021.

In his letter to shareholders, McPherson said the DOCA would allow the company’s “fine name and tradition” to continue on through insolvency under a new owner.

“Under this proposed DOCA, the employment of around 100 employees will be saved and the business will continue to provide its services, engineering and production functions for its long-established customer base,” he wrote.

“It is expected that the DOCA will allow for the outstanding entitlements and redundancy payments of those employees who had to be released from the company to be paid in full and also pay a distribution to other unsecured trade creditors.”

Under the Corporations Act, administrators can seek court orders allowing them to transfer shares.

“In the event that some shareholders do not agree to the transfer of their shares in the company, you should know that we are applying to court to seek orders enabling us to sign the Share Transfer in place of any shareholder who does not execute their share transfer, if the E&A Limited proposal is accepted and the company enters into the DOCA,” McPherson wrote.

“We do so on the basis that the transfer of shares is not, in our opinion, unfairly prejudicial to the interests of the members of the company.”

Meertens has until July 13 to lodge its report with creditors, seven days ahead of the proposed July 20 meeting.

Stirling said if the DOCA goes ahead, most creditors would not be paid in full, but would receive significantly more than if the company went into liquidation.

“In reality, given that the company cannot pay all of its creditors in full and the business has been trading at a loss for some time, there is no value in the shares, and allowing the DOCA proposal to go ahead at least provides benefit to employees and creditors of the company,” he wrote.

“The more expedient the transfer of shares to the new owner, the more likelihood of success of the new Nobles journey.

“The board acknowledges that this is not just a financial transaction, it is the end of an era for Nobles.

“Through these very difficult years of COVID, and the slow recovery within our industry, we have continued to maintain the Nobles brand of quality and may yet see it continue on for the next 110 years.”

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