Dubai-based shipbuilding and repairing giant, Drydocks World, or DDW, said on Wednesday that it remained “extremely confident” of securing the support of its syndicated lenders on restructuring $2.2 billion debt by April 2.
“Following from Drydocks World’s formal launch of its restructuring proposal at a lenders meeting in Dubai on March 8, the group has taken one step nearer to successfully concluding its restructuring by signing a lock-up agreement intended to formally secure its lenders support,” the company said in a statement.
DDW, the largest ship building company in the Middle East, said its syndicated facility lenders would be asked to sign up “to the lock-up agreement” and hence formally confirm their support for the group’s proposals.
“The group remains extremely confident that it can secure the necessary support of its syndicated lenders by April 2 to successfully implement its restructuring,” Khamis Juma Buamim, Chairman, Drydocks World and Maritime World said. The company has been in dialogue with its core group of lenders since late 2011 to develop a proposal for its debt restructuring. Over the recent months, with the support of its wider stakeholders, it has made significant progress in all aspects of the restructuring.
In December, Buamim said that Drydocks World was seeking to extend debt repayment for between five to eight years.
Drydocks World is among several Dubai companies seeking to restructure debt in the wake of the global recession. Dubai World, one of the three main state-controlled holding companies, reached a deal last March with about 80 banks to delay payments on $25 billion of debt, while Dubai Group is seeking to restructure $6 billion of bank debt. In 2008, DDW borrowed $2.2 billion to finance two acquisitions in Singapore to gain ships and Asian shipbuilding sites. The company borrowed $1.7 billion for three years at 170 basis points, or 1.7 percentage points, over the London interbank offered rate.
Bookrunners on the 15-lender syndicate were BNP Paribas, HSBC, Mashreq, Standard Chartered and Lloyd TSB Bank among others.
DDW borrowed another $500 million for five years at 190 basis points over Libor.
Two weeks ago, a US-based hedge fund Monarch Alternative Capital claimed in an emailed statement that Drydocks was ordered to pay the entirety of the sum of $71.6 million plus Monarch’s legal costs for defaulting on a loan.