Drydocks World, the Dubai-based shipyard restructuring US$2.2bn of debt, has support from 75 percent of its creditors to alter terms of its liabilities, a lawyer representing the company said.
“The company has significant financial resources to meet all of its liabilities,” Mark Hyde, head of insolvency and restructuring at Clifford Chance, said in a statement at the DIFC Courts today. “The company is far from being bankrupt.”
The firm earlier today filed an application with a tribunal handling disputes related to debt restructuring as the Dubai World-owned shipyard company seeks to alter terms on its liabilities.
The company filed an application with the Dubai World Tribunal under the government’s Decree No. 57 of 2009, according to the DIFC Courts. The application was due to be heard at 2pm today, according to a notice posted on the court’s website.
Decree 57 was enacted by Dubai’s government in 2009 to deal with the debt restructuring of state-owned holding company Dubai World and its subsidiaries. The decree states if at least two- thirds of creditors agree to a proposal, the tribunal has the power to make it binding on others involved in the claim, according to a posting on the tribunal’s website.
Drydocks is one several companies in Dubai seeking to restructure debt after property prices and asset values slumped in the Arabian Gulf business hub and credit markets froze. The company said March 31 it had secured necessary support from lenders to “rapidly” restructure the debt.
Drydocks has proposed to repay creditors over five years as part of a debt restructuring plan it submitted March 8.
New York-based Monarch Alternative Capital LP, a company that invests mainly in distressed debt, won a $45.5 million claim against Drydocks World in London’s High Court of Justice on Feb. 28 for defaulting on a loan. Drydocks Chairman Khamis Juma Buamim said he was confident the company could complete the restructuring despite the claim.
Drydocks borrowed US$2.2bn for two acquisitions in Singapore in 2008 to gain ships and Asian shipbuilding sites.