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US hedge fund wins claim against Drydocks

Dubai, March 14, 2012

A US-based hedge fund said it has won a $72 million legal claim against Dubai's Drydocks World for defaulting on a loan, putting the ship builder's $2.2 billion debt restructuring in further trouble.

Monarch Alternative Capital said in an emailed statement that Drydocks, a unit of Dubai World, has been ordered to pay the entirety of the sum of £45.5 million ($71.6 million) claimed plus Monarch's legal costs.

Monarch sued Drydocks last year in the High Court of London casting a blow to the restructuring talks.

A week ago, Drydocks proposed repaying creditors in five years and said it was seeking more working capital as it tried to restructure a $2.2 bln loan facility, ending lengthy and complex debt talks.

The restructuring had been scheduled to be completed by April 2011, but it was slowed by a lack of government support and opposition from hedge fund creditors, including Monarch.

When asked how the judgment would affect its restructuring Khamis Juma Buamim, Drydocks World chairman, said:     "As made clear at all lender meetings, the company is confident that it can still implement its restructuring if it transpires that Monarch do not accept the terms on offer."

"But I would very much hope that notwithstanding their legal action Monarch will accept the very reasonable restructuring proposal."     

Drydocks World's debts stem from a multibillion-dollar loan it took out to fund expansion in Singapore. Drydocks has its major ship and rig building facilities in southeast Asian countries such as Singapore and Indonesia. 

The $2.2 billion facility, taken out in October 2008, comprised a $1.7 billion three-year loan paying 170 basis points and a five-year $500 million loan with a 190 basis point margin, according to Thomson Reuters data. 

Bookrunners on the 15-lender syndicate were BNP Paribas, HSBC, Mashreq, Standard Chartered  and Lloyds Banking Group among others. - Reuters




Tags: Drydocks World | hedge fund | Restructure | Monarch Alternative Capital |

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