Aug. 28 (Bloomberg) -- A Dubai court sanctioned the $2.2 billion debt restructuring of Drydocks World LLC, the Middle East’s biggest shipyard, after creditors approved the plan.
The ruling by the special tribunal said 97.8 percent of Drydocks’s creditors agreed to the terms. A government decree allows the tribunal to enforce a restructuring proposal if at least two-thirds of the creditors agree to it.
Drydocks World, part of the state-controlled Dubai World group, filed an application to the Dubai tribunal in April to block lawsuits after failing to win support from all lenders.
New York-based investment company Monarch Alternative Capital LP, which won a $45.5 million claim against Drydocks in a London court, did not vote on the proposal, while JP Morgan Securities abstained, Adrian Cohen, partner at Clifford Chance LLP, the law firm representing Drydocks, told the court today.
Drydocks proposes to repay $2.2 billion of principal in full over five years under the restructuring plan. It borrowed the money to finance two acquisitions in Singapore in 2008 to gain ships and Asian shipbuilding sites. The company raised $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.