Dubai World unit nears $2.2 bln loan deal
Sees loan restructuring deal closed by April 30; Says doesn't need financial support from Dubai govt; No immediate plans for IPO, bond sale – chairman; To payback $90 mln to trade creditors by Apr 30
March 15, 2011 3:44 by Reuters
Drydocks World (DDW), a unit of debt-ridden Dubai World, expects to complete the restructuring of a $2.2 billion loan by April 30 and does not require government support, its chairman said on Tuesday.
“We are in the final stages of restructuring for the Dubai Drydocks World. The headline terms have been agreed upon,” Khamis Juma Buamim told reporters on the sidelines of an event in Dubai.
The glitzy emirate of Dubai was hit hard by the global financial crisis, which sent property prices slumping by more than 50 percent and forced several state-owned entities to restructure their debt obligations.
Dubai World, the Gulf emirate’s flagship conglomerate, which has itself restructured $25 billion in debt, has said Drydocks World was not part of its own restructuring as it had sufficient financial capacity to service its own debt.
Dubai Drydocks signed a $2.2 billion loan involving 15 lenders in October 2008, according to Thomson Reuters LPC. The shipbuilding arm of Dubai World has a $1.7 billion loan maturing in November 2011.
“The $2.2 billion is the only major syndicated loan facility we are restructuring. The rest are smaller bilateral loans which are being dealt with according to business needs separately,” he said.
The company also plans to repay $90 million to trade creditors by the end of April, the chairman said.
The Dubai-based ship and rig builder is also not in need of any government aid from a support fund that was created during the financial crisis to back debt-laden state-owned companies, the chairman said.
“We are not in talks for support from Dubai,” Buamim said.
He also denied recent media reports that the company was being sued in Singapore over non-payment to suppliers.
“I had personally gone to Singapore and settled the case in February,” he said.
IPO, BOND OPTIONS
Drydocks does not have any immediate plans for an initial public offering (IPO) or a bond sale but is looking at those options, Buamin said.
“IPO and bonds are the options available and we will see how they can help in our business. But there are no immediate plans,” he said.
Dubai is under no pressure to make asset sales this year, and its flagship conglomerate Dubai World will sign a final agreement on its $25 billion debt restructuring this week, a top official said last week.
Dubai World plans to sell its prized assets over a period of eight years to generate as much as $19.4 billion to pay off creditors, according to the restructuring proposal document obtained by Reuters last year.
Drydocks World signed a new $200 million credit facility in January and said it expected talks on terms of its core debt to be concluded within months.
The company was targeting total revenues of $2 billion in 2010, with Southeast Asia and the Middle East to generate around $850 million each, its chief executive said in an interview last year.
By Praveen Menon
(Writing by Dinesh Nair; Editing by Will Waterman)