Wednesday, 28 September 2016
Last updated 15 min ago
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.