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Wed 4 Apr 2012 02:32 PM

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98% of creditors on-board US$2.2bn Drydocks debt plan

Ship builder says all but one creditor have agreed terms of restructuring plan

98% of creditors on-board US$2.2bn Drydocks debt plan
Drydocks has been in lengthy talks to restructure its loan facility.

Dubai World's shipbuilding unit has signed up 98 percent of creditors to its US$2.2bn restructuring plan with all but one agreeing to the terms, its chairman said.

Drydocks World said this week it will use a special tribunal, set up in response to Dubai's 2009 debt crisis, to force recalcitrant creditors to take up its debt plan after some, including hedge funds, resisted the deal.

"We have got approvals from 98 percent of the creditors. It now looks like only one creditor remains," Khamis Juma Buamim told Reuters, declining to name the holdout.

On Tuesday, the firm's external advisor said US based hedge fund Monarch Alternative Capital, which won a US$45.5m legal claim against Drydocks in March for defaulting on a loan, is unlikely to accept the plan.

Monarch did not respond to queries seeking comment.

Drydocks has been in lengthy talks to restructure its loan facility and last month proposed repayment in five years.

The special tribunal process, created under Decree 57 issued by Dubai's ruler, requires 100 percent consent from creditors for a plan to be adopted.

But there is an option which can force dissenters to accept the plan once creditors holding 75 percent of the debt agree to it - a level Drydocks had reached before it began legal proceedings.

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