Creditors of Drydocks World, the Dubai government-owned company seeking to revise part of a $2.3 billion debt restructuring deal which it signed in 2012, have chosen Moelis & Co as their adviser, sources familiar with the matter said.
The selection of the New York-based advisory company should open the way to Drydocks offering a proposal to creditors, a move expected to happen later this quarter, with a view to closing a deal as early as the end of the fourth quarter, said one of the sources. Citigroup has already been picked by Drydocks as an adviser, the sources said, as previously reported by other media.
Moelis, Citigroup and Drydocks all declined to comment.
The marine engineering group is the latest United Arab Emirates company seeking to take advantage of low interest rates and a generally healthier economic backdrop to renegotiate a debt restructuring agreed after the 2009 financial crisis. Drydocks World’s parent company, Dubai World, earlier this year revised the terms of $14.6 billion of debt.
Moelis has experience of debt refinancing in the region, having previously advised Dubai World on its initial debt restructuring in 2011.
As Reuters reported in March, Drydocks is likely to ask for an extension on at least part of an $800 million tranche of restructured debt, which is due to mature in August 2017, according to Thomson Reuters data.
Any proposal could involve Drydocks receiving an injection of capital from the Dubai government, said the sources. The money would help recapitalise the company or cover some of the debt owed to creditors, one of the sources added
Dubai’s government extended billions of dollars to cash-strapped companies in the wake of the financial crisis.
Drydocks has changed its leadership in recent months; Dubai World board member Abdulrahman al-Saleh replaced Khamis Juma Buamim as chairman in March.
Saleh’s experience in helping steer Dubai World through its restructuring and his position as director-general of the Dubai Department of Finance and chairman of the Dubai Financial Support Fund, the fund formed in 2009 for struggling state-linked companies, was seen as a sign of deeper involvement by the government in Drydocks, said the sources.
The Department of Finance declined to comment.
In another change to the company’s leadership, C.S. Kim, who has experience working at a major South Korean shipyard, is now president and chief operating officer, according to the company’s website.-Reuters