UPDATE 1-Battling for life, Noble Group bets on $3.5 bln debt restructuring

* Special meeting of shareholders to decide firm's future

* Noble seeks to hand over 70 pct equity to its creditors

* Noble's value plunges to $143 mln from $6 bln in 2015

* Restructured company faces big task to cut losses, debt (Adds details in paragraphs 9, 12, adds link to graphic)

SINGAPORE, Aug 27 (Reuters) - Noble Group Ltd faces a key shareholder meeting on Monday as the shriveled commodity trader attempts to clinch a last-ditch $3.5 billion debt restructuring deal to stay afloat and put a three-year crisis behind it.

Shareholders are being asked to support a debt-for-equity swap that will leave them with ownership of just 20 percent of the business. Multiple sources familiar with the matter say the proposal is expected to succeed.

The meeting is due to start at 2:30 p.m. (0630 GMT).

Noble, founded in 1986 by Richard Elman, who took advantage of a commodities bull run to build it into one of the world's biggest traders, has had its market value all but wiped out from $6 billion in February 2015.

The crisis started that month after Arnaud Vagner, a former employee, published reports anonymously under the name of Iceberg Research that accused Noble of inflating its assets. The upheaval triggered a share price collapse, credit downgrades, writedowns and asset sales.

Singapore-listed Noble has always stood by its accounts.

Under a debt-for-equity swap agreed with a group of creditors comprised mainly of hedge funds, the company's debt will be halved and it will get access to trade finance and hedging facilities, vital in a sector where profit margins are in the low single digits.

In return, Noble will hand over 70 percent of its restructured business to creditors, while existing shareholders' equity will be reduced to 20 percent and its management will get 10 percent.

Noble chairman Paul Brough, a restructuring and liquidation expert, says shareholder support is key to prevent the company's insolvency.

Noble has won the backing of 30 percent of its shareholders, including Elman, its former chairman, and only needs a simple majority of the voters in attendance at Monday's meeting for the debt restructuring to go ahead.

The company's shareholders include sovereign wealth fund China Investment Corp, Abu Dhabi-based fund Goldilocks Investment Co Ltd and Eastspring Investments, and retail investors.

Trading in Noble's shares was halted on Monday pending an announcement by the company.

In its glory days, Noble employed hundreds of traders, with ambitions to rival competitors like Glencore but it had to sell off prized assets, including its oil and gas units, to rivals Vitol and Mercuria.

Analysts say Noble still faces an uphill battle, with its losses widening to $128 million during the April to June quarter from $72 million in the first quarter.

"There's no evidence so far that the business is turning around," said Neel Gopalakrishnan, credit strategist at DBS Group. "Funding is the most important driver for this business and if a turnaround doesn't come, the company may find it difficult to retain funding lines."

If the vote does not go its way, Noble will seek to implement a similar restructuring plan to keep it as a going concern but current shareholders would not receive any equity under that plan.

(Reporting by Anshuman Daga; Editing by Richard Pullin and Christian Schmollinger)