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Indebted Drydocks in Kuok JV for Asia operations
Drydocks World, which sought insolvency protection in April as it restructures $2.2 billion of debt, signed a joint venture for its Southeast Asia operations with Pacific Carrier Ltd. on Wednesday, part of Malaysian tycoon Robert Kuok's empire.
June 27, 2012 5:34 by Reuters
Drydocks World, which sought insolvency protection in April as it restructures $2.2 billion of debt, signed a joint venture for its Southeast Asia operations with Pacific Carrier Ltd. on Wednesday, part of Malaysian tycoon Robert Kuok’s empire.
Financial terms were not disclosed. A source close to the deal said Pacific Carrier will take a 60- to 70-percent stake in the new company, DDW-PaxOcean Asia. The deal is slated to close in the third quarter this year.
“We are now focusing on how the company can bring its debt level down and keep going on,” Drydocks Chairman Khamis Juma Buamim told reporters.
Reuters reported on Tuesday that a firm linked to Kuok, Malaysia’s richest man, and Drydocks were close to a deal.
Drydocks bought its Southeast Asian operations, based in Singapore and Indonesia, in 2007 for about $2.2 billion and the debt being restructured stems from loans it took to fund the expansion.
Buamim said Drydocks’ lenders, which include BNP Paribas, HSBC and Standard Chartered, have approved the plan.
The shipbuilding and repair firm, part of state-linked conglomerate Dubai World, turned to a special tribunal to force creditors to sign up to its debt restructuring plan and filed legal proceedings in Singapore to push through the proposal.
The new Singapore-based joint venture will need $600 million in working capital over the next three years, Buamim said.
Pacific Carrier, a wholly-owned unit of Kuok Group, is a dry bulk operator with a fleet of product tankers and offshore support vessels.
“I see this as an opportunity to create value for both companies,” Teo Joo Kim, Pacific’s chairman, told reporters, adding his firm was not interested in increasing its stake.
“We are not buying for the sake of it. It has to add value.”
The new joint venture will be based in Singapore.
(Reporting by Praveen Menon; Editing by Amran Abocar)