Tuesday, April 3, 2012

Dubai Based Shipyard Files for Protection

Tribunal Asked to Rule on Restructuring
Shipping News Feature

DUBAI – The news that Drydocks World, motto ‘The World’s Shipyard’, has turned to the Court for assistance is a watershed in the financial history of the Emirate. This will be the first time that any UAE company has needed the support of the special tribunal following the failure to elicit enough help from its debtors in its quest to offset its $2 billion plus restructuring. The tribunal was formed three years ago when the extent of parent company Dubai World’s $25 billion overall indebtedness was revealed and Drydocks World has intimated that it has the 66% support the tribunal requires from existing debtors to ensure its proposals to restructure are passed.

The notification to the tribunal is subject to ‘Decree 57’ and follows the failure of the shipyard to obtain the assent of all of its creditors and the company says with $255 million of new build orders this year alone its restructuring proposals will leave the Group in a strong position to continue to develop and implement its strategic plans. It also insists that the legal progress will have no impact on its current operations. Khamis Juma Buamim, Chairman of Drydocks World and Maritime World commented:

“We take this step to protect the interests of the vast majority of the Group’s syndicated lenders, the clients, suppliers and wider stakeholders who continue to support the business throughout its restructuring, and who will continue to support it for years to come.”

According to reports some of the actual debts in fact refer to the company’s Far East operations namely Singapore which is likely to be sold off and any outstanding debts transferred to the Dubai operation. In February a New York hedge fund which specialises in ‘distressed’ debt won a London Court case against Drydocks World to the tune of $45.5 million to which Mr Buamim responded at the time he was hopeful Monarch would accept the ‘very reasonable’ restructuring proposal.