By ADAM SCHRECK, Associated Press
DUBAI, United Arab Emirates (AP) — Dubai's shipyard operator Drydocks World signed a deal Wednesday to form a joint venture for its Asian operations with Singapore's Kuok Group as it tries to close a $2.2 billion debt restructuring.
The debt-laden shipbuilder has been working on the deal since at least December, when chairman Khamis Juma Buamim first discussed the possibility of sharing control of its Asian businesses.
Its parent company, Dubai World, sent markets reeling in 2009 when it acknowledged it couldn't pay back billions it owed. It signed an agreement to restructure some $25 billion in debt last March, but DryDocks World was excluded from that process.
Financial terms for the Asia deal were not disclosed, making it difficult to determine how the deal would help Drydocks World's debt-lightening efforts. Company executives declined to say how much of a stake Kuok would have in the venture.
Buamim has repeatedly characterized the planned tie-up as a partnership rather than an acquisition, a theme he reiterated at the deal's signing in Dubai.
"This is joint venture of true value. It is not a takeover. It is not a process where people are running away from their responsibilities or anything like that," Buamim told reporters.
Drydocks World operates the Middle East's largest shipyard in Dubai, where it builds and repairs ships and oil drilling rigs. That yard is not included in the venture.
Its Asian business consists of four shipyards in Singapore and Indonesia, as well as a fleet of more than 100 tankers, cargo ships, tugboats, barges and other vessels.
The new venture, a partnership with Kuok's Pacific Carrier Ltd., will be named DDW-PaxOcean Asia Pte Ltd and will be based in Singapore. Buamim will be the chairman, but the role of CEO has not been determined.
Kuok Group is a holding company for a group of Singapore-based businesses owned by the family of Malaysian tycoon Robert Kuok, one of Southeast Asia's richest men. Its Pacific Carrier division operates a fleet of ships hauling dry bulk goods, tankers and other vessels.
Drydocks World is trying to drive through a drawn-out restructuring effort to rework the terms on $2.2 billion in debt. The negotiations have been complicated by a lawsuit by one of its creditors, Monarch Alternative Capital, which was seeking about $45 million.
The shipbuilder filed a claim with a special Dubai tribunal in April, aiming to force holdout creditors to agree to its revised debt terms.
DryDocks World expects the Asia venture deal to close in the third quarter.
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