Drydocks World, the shipbuilding and repair arm of Dubai World, has finally obtained the official go-ahead from creditors for its $2.2 billion debt-restructuring plan.
At a meeting in Dubai on Tuesday, creditors holding more than 97 per cent of the debt to be restructured officially agreed to the deal, a statement from professional services firm of PricewaterhouseCoopers, or PwC, said.
PwC is advising Drydocks on the restructuring alongside law firm Clifford Chance.
“The approval of the proposals at today’s meetings is a fundamental step to concluding Drydocks ‘ debt restructuring,” said Ian Schneider, a partner at PwC.
“The level of support received by the companies far exceeded the two-thirds majority required by the Decree 57 legislation to approve these proposals,” the statement said. The shipbuilding and repair company, which has unveiled an ambitious underwater hotels and floating cities project, the first of its kind in the region, is using the Dubai World Tribunal, a special judicial body formed by Dubai’s Decree 57 of 2009, to expedite its restructuring proposals.
PwC said Drydocks would seek a sanction of the approvals from the Tribunal at a hearing on August 28. If the Tribunal gives its blessing, “the restructuring should be formally effective shortly thereafter,” PwC’s statement said. The tribunal was set up in the wake of Dubai’s 2009 debt crisis as part of new legal procedures meant to govern the restructuring of Dubai World debts. A panel of three judges from Britain and Singapore presides over the Dubai World Tribunal.
The Government of Dubai developed Decree No. 57 to allow groups such as Drydocks World to implement a restructuring where its proposals had the support of a significant majority of its lenders, but where it does not have the requisite 100 per cent buy-in needed to implement its plans successfully.
It is understood only one creditor did not attend Tuesday’s meetings or vote on the restructuring proposal.
Monarch Alternative Capital, a private US hedge fund, has been holding out on the deal and won a claim against Drydocks in London this March.
The news about the long-pending debt deal came as Drydocks World announced the completion of maintenance work on Abu Dhabi-UAE based National Drilling Company’s drilling platform, Delma, which was built in Brazil in 1983.
Drydocks World has repaired over 100 rigs since operations began and has implemented more projects for the offshore drilling sector in recent years as part of a deliberate strategy to serve this rapidly growing sector.
“We are extremely delighted to have completed yet another challenging project for NDC. We have developed our business strategy around the offshore oil and gas industry as we see definite long-term growth prospects in this field due to continued offshore exploration and development. Drilling rigs with enhanced capabilities are a prerequisite as search for new hydrocarbon reserves reach deeper and harsher waters,” Drydocks World and Maritime World chairman Khamis Juma Buamim said.