Dubai shipbuilder wins debt restructuring support
Sunday, April 1, 2012
DUBAI, United Arab Emirates (AP) — Dubai’s DryDocks World has secured support from a significant majority of creditors to implement its $2.2 billion debt restructuring, the state-owned shipyard operator said Saturday.
The company, a division of the emirate’s debt-laden Dubai World conglomerate, has been in talks with lenders for months to hammer out new terms on the debt. It didn’t provide details of the revised repayment terms or say how many lenders agreed to the deal.
While it has sufficient support to implement the restructuring, a “small minority” of lenders have not signed on to the plan, the company said.
“The group has always sought the support of all its syndicated lenders and its proposals were designed to achieve that,” Chairman Khamis Juma Buamim said in a statement. “The group remains confident the absence of support from this minority will have no impact on the ... restructuring.”
DryDocks’ debt talks were complicated by a lawsuit by one of its creditors, Monarch Alternative Capital, which was seeking about $45 million it was owed. A British court ruled in Monarch’s favor earlier this year.
DryDocks World operates the Middle East’s largest shipyard in Dubai, where it builds and repairs ships and oil drilling rigs. It also owns shipyards in Singapore and Indonesia, and other Asian businesses including a fleet of more than 100 vessels, including tankers, cargo ships, tugboats and barges.
Its parent company, Dubai World, sent markets reeling in 2009 when it acknowledged it couldn’t pay back billions it owed. It signed an agreement to restructure some $25 billion in debt last March. Subsidiary companies such as DryDocks World have since tried to retool the terms on their own piles of debt.
Credit rating firm Moody’s Investors Service in December estimated that Dubai and its many state-linked companies owe creditors at least $101.5 billion.
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