A special court in Dubai on Tuesday formally approved the $2.2 billion restructuring of shipbuilding unit Drydocks World, thereby making the complex debt deal effective.
Creditors holding more than 97.8 per cent of the debt had agreed to the deal at a meeting held in July. The firm had said it would seek sanction of the approvals from the Dubai World Tribunal at a hearing on August 28.
“The sanctioning of the Company Voluntary Arrangements concludes the formal approval of Drydocks World Dubai’s debt restructuring proposals,” Drydocks said in a statement following the hearing.
Drydocks, a unit of conglomerate Dubai World, approached the special tribunal in April to force recalcitrant creditors to sign up to its debt restructuring plan.
US-based hedge fund Monarch Alternative Capital did not approve the proposal. The firm won a $45.5 million legal claim against Drydocks in April.
Drydocks is restructuring debt from loans taken in 2007 to fund expansion of its southeast Asian operations, based in Singapore and Indonesia.
The firm sealed a joint venture deal in June with a company backed by Malaysian billionaire Robert Kuok that could see the Asian firm buy as much as 70 per cent of its southeast Asian business.