Creditors owed money by Dubai’s Drydocks World are set to get back just 21 cents on the dollar as the ship repair giant falls back on local Emirati rules to protect it ahead of its sale to compatriot DP World, the global terminal operator.
State-run Drydocks World has used a local law, Decree 57, to push through its $2.1bn debt restructuring and keep legal action from creditors at bay. The company filed for a moratorium against creditors at the Dubai World Tribunal at the courts of the Dubai International Financial Centre on Monday.
DP World said last month it will acquire the ship repair yard via a cash injection of $225m on the completion of Drydocks World’s restructuring process.
Creditors are set to get back just a fifth of what they invested in the $1.4bn junior portion of the debt the repair company has accrued. The remaining, senior portion will not be subject to a haircut, according to the Financial Times.