Drydocks Said to Pay Part of $2.25 Billion Loan Over 15 Years

2012-09-04

Drydocks World LLC, the Middle East’s biggest shipyard, may pay part of its $2.25 billion of loans over 15 years as part of a debt-restructuring deal, according to a person with knowledge of the plan.

The Dubai World-controlled company replaced the old debt with two new facilities, including a $1.5 billion, 15-year so- called profit participating loan, according to the person, who asked not to be identified because the information is private. The facility will pay creditors any excess profit or cash from asset sales apart from interest, the person said. Drydocks World also agreed on a new $800 million five-year loan which pays a market interest rate, according to the person.

A Dubai-based Drydocks spokeswoman, who asked not to be identified because of company policy, declined to comment.

A special court in Dubai sanctioned the debt restructuring on Aug. 28 after creditors approved the plan, without providing the terms of the deal. The Dubai World Tribunal, set up in 2009 to handle claims against Dubai World and its subsidiaries, approved the restructuring after 97.8 percent of Drydocks’s creditors agreed. The tribunal can enforce a restructuring plan if at least two-thirds of the creditors agree.

The debt restructuring plan also includes the setting up of a new holding company based in the tax-free Dubai International Financial Center to hold the profit participation loan, the person said. That company will sit between Drydocks World and Drydocks World-Dubai LLC so that the facility will not be a direct liability of Drydocks World-Dubai, the person said.

Drydocks’ lenders include BNP Paribas SA (BNP), DBS Group Holdings Ltd., Emirates NBD PJSC (EMIRATES), HSBC Holdings Plc (HSBA), ING Groep NV (INGA), Lloyds TSB Bank Plc, Mashreqbank PSC (MASQ) and Standard Chartered Plc. (STAN) The original loan includes a $1.29 billion facility, a S$553 million ($443 million) portion and a 1.9 billion-dirham ($517 million) syndicated facility, according to the tribunal documents.

Source: Bloomberg

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