Business | Shipping

Drydocks close to deal on debt

Hopes to complete restructure by July

  • Gulf News Report
  • Published: 00:00 April 6, 2012
  • Gulf News

Dubai Drydocks
  • Image Credit: Gulf News Archives
  • Dubai Drydocks

Dubai Drydocks World Thursday said that a great majority of its lenders formally support its proposals to successfully implement the restructuring of its $2.2 billion (Dh8 billion) debt.

The development process, which follows on from the shipbuilding and repair company's filing for Decree 57 on Sunday with the Dubai World Tribunal, will have "no effect" upon the ongoing operations of Drydocks World, its clients, suppliers or employees, the company said in a statement, adding it will "be business as usual" during the process and going forward once the restructuring is effective.

Drydocks said earlier in the week that it filed for notifications following opposition to the plan by some lenders even as the company managed to receive approvals from the significant majority of its syndicated lender group. The special tribunal process requires 100 per cent consent from creditors for a plan to be adopted.

In yesterday's statement, the company said that once implemented, the business should be "well placed to progress its strategic ambitions, secure in the knowledge that it is on a firm financial footing".

Hoping to complete the restructuring by July, the company has been in discussions with lenders since late 2011.

"Drydocks Dubai's use of Decree 57 to help it conclude its restructuring is ground-breaking and was not a step the business took lightly. It is a pragmatic and sensible solution with the crucial ability of allowing a financial restructuring to take place without adversely impacting the business, its operations or its people.

Decision

"This lack of support is not in the interests of the business, its operations, its future or its people. It is a decision they have taken for their own reasons. Their lack of support makes no difference to Drydocks Dubai's ability to conclude its restructuring," Khamis Juma Bu Amim, Chairman of Drydocks World and Maritime World, said in a statement.

He, however, said on Wednesday that "98 per cent of creditors" had signed up to the company's restructuring plan "with all, but one agreeing to the terms", as reported by Reuters. "We have got approvals from 98 per cent of the creditors. It now looks like only one creditor remains," he reportedly said, without divulging further details.

Meanwhile, Drydocks Worlds' external adviser, PricewaterhouseCoopers (PwC) reportedly said on Tuesday it doesn't expect to receive support from New York-based hedge fund Monarch Capital, which won a $45.5 million legal claim against Drydocks World in mid-March for defaulting on a financial obligation.

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