Dubai’s Drydocks World to Complete $2.2 Billion Debt Restructuring by July

Drydocks World LLC plans to present next week the terms to restructure $2.2 billion of debt as the global credit crisis forces Dubai’s state-linked companies to alter terms on loan repayments.

Drydocks World, a unit of state-controlled Dubai World, will on March 8 “present the terms of its proposal and the steps required to implement it along with the associated timeline to all its syndicated lenders,” the company said in an e-mailed statement today. The company, which expects to complete the restructuring by July, “is confident that it will receive the support of a majority of its syndicated lenders to the terms of its debt restructuring,” it said.

Drydocks World is one several companies in Dubai seeking to restructure debt after property prices and asset values slumped in the Persian Gulf business hub and credit markets froze. Dubai World, one of the three main state-controlled holding companies, reached a deal last March with about 80 banks to delay payments on $25 billion of debt, while Dubai Group LLC is seeking to restructure $6 billion of bank debt.

Drydocks World borrowed $2.2 billion to finance two acquisitions in Singapore in 2008 to gain ships and Asian shipbuilding sites. The company borrowed $1.7 billion for three years at 170 basis points, or 1.7 percentage points, over the London interbank offered rate, according to data compiled by Bloomberg. It borrowed another $500 million for five years at 190 basis points over Libor, the data shows.

BNP Paribas SA, DBS Group Holdings Ltd., Emirates NBD PJSC (EMIRATES), HSBC Holdings Plc (HSBA), ING Groep NV, Lloyds TSB Group Plc, Mashreqbank PSC (MASQ) and Standard Chartered Plc were helping Drydocks World get the loans, the company said in 2008.

Government Support

Chairman Juma Buamim said in December Drydocks World hasn’t asked for government support on its debt. The company will pay back the loans in five to eight years and continues to pay interest on them at existing terms, he said at the time.

Drydocks World’s Dubai unit, the Middle East’s largest shipyard, will post a profit of $116 million in 2011 that may rise by 15 percent next year, Buamim said. It reduced losses from its southeast Asian business to 5 percent of revenue in 2011 from more than 20 percent last year and is looking for joint venture partners for its contracting and manpower businesses as well as to add capacity, he said.

The Dubai unit carries out vessel conversions, ship building and offshore construction, apart from ship repairs, mainly of ultra and very large crude carriers. The company has yards operating in Singapore and Indonesia, in Graha, Pertama and Nanindah. It also operates a fleet of 158 vessels, comprising tankers, bulk, cargo vessels and tugs, according to its website.

To contact the reporter on this story: Stefania Bianchi in Dubai at sbianchi10@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

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