Dubai World on Tuesday moved to protect its Drydocks World unit saying it would not be part of Dubai World's wider $26 billion restructuring programme as it had sufficient financial capacity to service its debt.
"Following further review, Drydocks World and its subsidiaries will not be included in the proposed restructuring process for Dubai World and its real estate-related subsidiaries," Dubai World said in a statement.
The struggling state-owned conglomerate Dubai World on Nov. 30 shed some light on how it planned to restructure its debt pile, including through asset sales, but said Istithmar World, DP World and Jebel Ali Free Zone would not be part of it.
Drydocks World had been in "constructive" dialogue with its lenders for several months and the firm continued to have "sufficient financial capacity to service its debt," Dubai World said.
Investor confidence in Dubai took a fresh knock on Tuesday as officials dithered over a rescue for debt-laden Dubai World and ratings agency Moody's slapped a downgrade on government-related debt.
The ship building arm of Dubai World has a $1.7 billion loan maturing in November 2011. Dubai Drydocks, signed a $2.2 billion loan in October 2008, involving 15 lenders, according to Thomson Reuters LPC.
Bookrunners on that loan included HSBC and Standard Chartered. Sumitomo Mitsui, Japan's third-ranked bank by assets, and Australia's Westpac Banking Corp were among the banks that took part in the financing. "
(Drydocks) remains well-positioned to take advantage of the expected improvements in the ship building and offshore industries in the coming years," Dubai World said.
The firm made its first acquisitions abroad in 2007, paying about $424 million for Singapore shipbuilder Pan-United Marine, and $1.6 billion to buy the city-state's offshore oil-rig builder Labroy Marine.
Dubai's finance chief on Monday said while Dubai World might sell some assets to finance its commitments, the government, which borrowed to transform the emirate from a desert backwater into the a major trading and tourism centre, would not make any disposals of its own.
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