Drydocks plan 'has backing of huge majority'
Dubai, April 5, 2012
Dubai-based Drydocks World today confirmed that an overwhelming majority of its lenders have formally supported its proposals to enable it to successfully implement its restructuring.
The statement follows from Drydocks World - Dubai and Drydocks World (together the Drydocks World - Dubai) filing for Decree 57 on April 1. The decree allows groups to implement a restructuring where its proposals had the support of a significant majority of its lenders, but where it does not have the requisite 100 per cent buy-in needed to implement its plans successfully.
A reuters report earlier quoted Drydocks World chairman Khamis Juma Buamim as saying that the company has got 98 percent of creditors signed up to its $2.2 billion restructuring plan with all but one agreeing to the terms.
'We have got approvals from 98 percent of the creditors. It now looks like only one creditor remains,' Buamim said, declining to name the holdout.
On Tuesday, the firm's external advisor said US based hedge fund Monarch Alternative Capital, which won a $45.5 million legal claim against Drydocks in March for defaulting on a loan, is unlikely to accept the plan.
Monarch did not respond to queries seeking comment.
The special tribunal process, created under Decree 57 issued by Dubai's ruler, requires 100 percent consent from creditors for a plan to be adopted. But there is an option which can force dissenters to accept the plan once creditors holding 75 percent of the debt agree to it - a level Drydocks had reached before it began legal proceedings.
Today's statement said the restructuring process will have no effect upon the on-going operations of Drydocks World, its clients, suppliers or employees. It will be business as usual during the process and going forward once the restructuring is effective.
Khamis Juma Buamim, chairman of Drydocks World and Maritime World, said in a statement: “Drydocks Dubai’s use of Decree 57 to help it conclude its restructuring is ground-breaking and was not a step the business took lightly. It is a pragmatic and sensible solution with the crucial ability of allowing a fiancial restructuring to take place without adversely impacting the business, its operations or its people.
“The business believes strongly in commercial fundamentals of seeking to do what’s right for its customers, suppliers and employees and all its stakeholders. Consequently, the business took the view that the will of the vast majority of its syndicated lenders to support its proposals, should override the disappointing response from an insignifcant minority of its syndicated lenders who to date have failed to support the company’s proposals. This lack of support is not in the interests of the business, its operations, its future or its people. It is a decision they have taken for their own reasons. Their lack of support makes no difference to Drydocks Dubai’s ability to conclude its restructuring,” he said.
The overwhelming support Drydocks World - Dubai has for its proposals should enable it to rapidly implement its debt restructuring, he said.
Once implemented, the business should be well placed to progress its strategic ambitions, secure in the knowledge that it is on a firm financial footing, said the statement. – TradeArabia News Service and Reuters