Monarch Unlikely To Accept Dubai Debt Deal

Apr 4 2012 | 2:28am ET

Dubai's Drydocks World is moving forward with its debt restructuring plans in the face of determined opposition from one hedge fund creditor.

The subsidiary of Dubai World, which is owned by the emirate's government, has asked a special tribunal to approve its US$2.2 billion debt plan. Under a 2009 law designed to protect state-owned entities from creditors, the tribunal—made up of three judges from the U.K. and Singapore—can force a settlement if it has the backing of creditors holding 75% of the debt in question.

Drydocks World already has the support of 87% of creditors, a figure expected to rise to 94% within a week. But don't expect Monarch Alternative Capital to be among the assenters.

The U.S. hedge fund, which last month won a US$72 million verdict against Drydocks World in a British court, probably won't go along, one of Drydocks' three nominees to oversee its debt plan, said.

"I remain skeptical that Monarch will agree to the deal," PricewaterhouseCoopers' Ian Schneider said. Monarch has accused Drydocks of defaulting on a loan.

Still, Schneider said, the deal could be completed by early July. Under Drydocks' plan, the maturities on the loans would be extended by five years.


In Depth

AIMA: Smaller Firms Remain the Lifeblood of the Hedge Fund Industry

Jul 26 2017 | 5:55pm ET

It is a hedge fund industry truism that the largest managers receive the most attention...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Rastegar: PE Real Estate Gains Momentum as Uncertainty Rises

Jul 21 2017 | 6:04pm ET

The steady march of equity markets and fundamental shift in the direction of Fed...