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Sat 31 Mar 2012 10:39 AM

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Dubai's Drydocks says close to $2.2bn debt deal

Ship building unit says 'significant majority' of lenders agreed on restructuring plan

Dubai's Drydocks says close to $2.2bn debt deal
So far this year, Drydocks has won $300m of contracts in Dubai for building and converting ships

Dubai's ship building unit Drydocks World has secured the necessary level of support from its syndicated lenders to implement the restructuring of its $2.2bn debt, the company said in a statement on Saturday.

The Dubai World unit said a "significant majority" of the Group's lenders had formally confirmed their support for the restructuring. However, a small minority is yet to confirm support, it added.

The company did not specify what percentage of lenders needed to agree for it to go ahead with the restructuring proposal.

"The Group remains confident the absence of support from this minority will have no impact on the group's restructuring," said the chairman of Drydocks World Khamis Juma Buamim in the statement.

It said last week that it hoped to secure lenders support by April 2.

Drydocks World has been in negotiations to restructure its loan facility in an effort to put an end to lengthy and complex debt talks.

Earlier this month, the company proposed repaying creditors in five years and said it was seeking more working capital.

Drydocks World's debt restructuring, initially expected to be completed by April last year, has dragged on as the presence of hedge funds and a lack of government support curbed prospects of an amicable deal.

A US-based hedge fund Monarch Alternative Capital won a $45.5m legal claim against Drydocks this month for defaulting on a loan, putting the ship builder's restructuring in further trouble.

The firm's debts stem from a multibillion-dollar loan it took out to fund expansion in Singapore. Its major ship and rig building facilities are in southeast Asian countries such as Singapore and Indonesia.

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