Dubai’s Drydocks World is asking its creditors to lock-in a debt restructuring deal, in a bid to put the company’s obligations on a stable footing by a 2 April deadline.
“Following on from Drydocks World’s formal launch of its restructuring proposal at its all lender meeting in Dubai on 8 March 2012, 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,” said Drydocks in a statement.
Monarch, a US-based hedge fund recently won a $45.5 million legal claim against Dubai’s Drydocks World in a London court earlier this month for defaulting on a loan, a development which has cast doubt on the viability on the company’s $2.2 billion debt restructuring plan.Â
Drydocks is currently behind on a $1.7 billion loan facility, and faces a further $500 million repayment when a second facility matures next year.
Drydocks’s Chairman Khamis Juma Buamim previously told Bloomberg he hopes the Monarch fund joins the comapny’s debt plan notwithstanding its legal win, and is confident the ship builder implement its restructuring even if Monarch do not accept the terms on offer.
The success of the restructuring plan will partly depend onif Drydocks’s ability to treat all creditors equally, something which is endangered by Monarch’s apparent determination to enforce their court judgment against the company. Monarch may also choose to enforce the judgment against Drydocks’ assets outside the UAE, such as Singapore.
“Having had time to consider the Group’s proposals since 8 March 2012, over the coming days the Group’s syndicated facility lenders will be asked to sign up to the lock-up agreement and hence formally confirm their support for the Group’s proposals,” the Drydocks statement said today.
“The Group remains extremely confident it can secure the necessary support of its syndicated lenders by 2 April 2012 to successfully implement its restructuring,” said Buamim.
Drydocks is hoping to pay off its $2.2 billion debt pile over the next five years.
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