Monarch Wins Default Judgment Against Dubai World Unit

Mar 14 2012 | 1:39pm ET

Hedge fund Monarch Alternative Capital has put the future of Dubai-based Drydocks World in doubt with a US$72 million-plus court victory in London.

The High Court of London has ordered the Dubai World unit to pay Monarch £45.5 million, as well as its legal costs. Monarch had accused Drydocks of defaulting on a loan.

The legal victory, trumpeted by Monarch, puts Drydock's debt restructuring on the rocks. The company is trying to restructure a US$2.2 billion loan facility, and just last week offered to repay creditors over five years.

Drydocks World Chairman Khamis Juma Buamim told Reuters that he "would very much hope that, notwithstanding their legal action, Monarch will accept the very reasonable restructuring proposal." But, he said, "the company is confident that it can still implement its restructuring if it transpires that Monarch do no accept the terms on offer."

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