Drydocks World LLC, owner of the Middle East’s biggest shipyard in Dubai, is “confident” it can complete a $2.2 billion debt restructuring even after a hedge fund won a $45.5 million claim against it in a London court.
New York-based Monarch Alternative Capital LP, a company that invests mainly in distressed debt, won the claim against Drydocks in the High Court of Justice on Feb. 28, Monarch spokesman Jeremy Fielding confirmed in an e-mailed response to questions from Bloomberg News today. A unit of Monarch filed the claim against Drydocks in October.
“I would very much hope that, notwithstanding their legal action, Monarch will accept the very reasonable restructuring proposal,” Drydocks Chairman Khamis Juma Buamim said in response to e-mailed questions today. The company, a unit of state-owned Dubai World, “is confident that it can still implement its restructuring if it transpires that Monarch do not accept the terms on offer.”
Drydocks has proposed to repay creditors over five years as part of a debt restructuring plan it submitted March 8. The company is one of several in Dubai seeking to restructure debt after property prices and asset values slumped in the Persian Gulf business hub and credit markets froze with the onset of the 2008 global credit crisis.
Drydocks borrowed $2.2 billion to finance two acquisitions in Singapore in 2008 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, according to data compiled by Bloomberg. It borrowed another $500 million for five years at 190 basis points over Libor, the data shows.
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