LONDON, Nov 27 (Reuters) - Creditors to UAE shipbuilder Drydocks, a unit of conglomerate Dubai World, have given unanimous support to a restructuring plan which will see Dubai-based ports operator DP World take control of Drydocks, sources close to the situation said on Monday.
The deal is now set to close in January, one of the sources said.
On September 18, Dubai-based ports operator DP World agreed to take 100% control of Drydocks World in return for a capital injection of US$225m.
Under the terms of the restructuring plan the cash will be used to pay out the around US$1.4bn outstanding of junior debt at around 23 cents in the dollar. The remaining US$640m outstanding of senior debt will be reinstated into a new facility which will have a three-year tranche paying 200bp over Libor and a five-year tranche paying 250bp over Libor.
By October around 88% of creditors had agreed to sign up to the deal and court processes were started to initiate the use of Decree 57 in Dubai and a UK scheme of arrangement in England to cram down a couple of holdout lenders. These lenders have now signed up to the deal and the court processes are no longer necessary.
“Now that we have unanimous support the next step is to discontinue the Decree 57 and UK scheme processes and then we hope to complete the deal by early January,” the source said.
Around 75% of creditors have a stake in the junior and senior debt that was originally taken in October 2000 to fund Drydocks’ expansion in Singapore. At that time it comprised a US$1.7bn three-year loan and a US$500m five-year loan.
Discussions around this latest restructuring began in March 2015 and after a previous restructuring of the same debt in 2012 when Drydocks used Decree 57 to restructure and extend the maturities of the US$2.2bn loan. Following that restructuring a new US$800m senior facility was put in place which had an August 2017 maturity and a US$1.5bn junior tranche.
The US$800m senior debt tranche is trading at 95.2 cents in the dollar on Europe’s secondary loan market - up from 79.75 cents on the dollar on January 2 - according to data from Thomson Reuters LPC.
Restructuring advisers Moelis have been advising an institutional bank group comprising Davidson Kempner, Emirates NBD, Goldman Sachs ESSG and Mashreqbank on the deal.
Drydocks is being advised by Citigroup and law firm Clifford Chance.
Drydocks did not immediately respond to an emailed request for comment. (Editing by Alasdair Reilly)