Drydocks World secures $200m in loans for operations

Drydocks World has secured US$200 million in loans to cover working capital over the next three months.

Drydocks World, the ship repair business owned by Dubai World, has secured US$200 million (Dh734.5m) in loans to cover working capital over the next three months.

The agreement, announced by WAM, the state news agency, has been signed with seven of Drydocks World's existing creditors and is on a secured basis.

The announcement also confirmed the company was in talks with creditors to restructure the rest of its liabilities.

Drydocks World is among several businesses excluded from the restructuring of $24.9 billion of debts held by Dubai World. The conglomerate is in the final stages of completing a deal to extend repayment terms on lower interest rates with more than 90 regional and international banks.

JP Morgan, the US investment bank, recently calculated Drydocks World had outstanding near-term liabilities of $1.7bn, due to repaid in November.

The Dubai Government statement said the $200m facility "is available for drawing to provide working capital instruments [for example, refund guarantees and performance bonds] to [Drydocks World's] trading counter-parties in relation to new and existing contracts".

"This facility is an important demonstration of the ongoing support for [Drydocks World] from our key banks," said Khamis Juma Bu Amim, the chairman of Drydocks World and its sister company, Maritime World.

"It will enable the company to continue to provide high-quality services to its customers from its yards in Dubai, Singapore and Indonesia.

"[Drydocks World] is about to enter into discussions with representatives of its lenders to amend the terms of its core syndicated debt facility as well as for the provision of new long-term working capital facilities. This process is likely to be concluded in the coming months."

Other parts of Dubai World outside the restructuring include the property company Limitless, the utility business Palm District Cooling, and Port and Free Zone World (PFZW).

Combined, these three entities have debts of $2.7bn maturing between March and September this year.

Limitless is already in discussion with creditors over its $1.2bn debts. The status of discussions over Palm District Cooling's $500m liability is unknown.

PFZW is the intermediate holding company between Dubai World and DP World, the international logistics business quoted on Nasdaq Dubai and planning to list on the London Stock Exchange this year.

JP Morgan said dividends from DP World ($110m in 2009) appeared to be the only source of cash flow for PZWF, which also owns the Jebel Ali Free Zone Authority.

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