Drydocks World has filed an application to the Dubai World Tribunal at the DIFC Courts to push through its $2.2 billion (Dh8.08bn) debt restructuring via a Government decree.
The ship builder yesterday said its debt deal was being held up by a minority of investors who had yet to agree to a five year plan to repay the debt owed.
Decree 57, which Drydocks is filing for at the DIFC Courts, was created by the Dubai government in 2009 to deal with disputes related to the debt restructuring of Dubai World, which owns Drydocks.
Arcapita, an investment bank based in Bahrain, last month filed for bankruptcy protection in the US after talks with hedge funds over its $1.1bn debt broke down.
Three hedge funds own part of Drydocks’ $2.2bn debt. It is yet unclear whether they are the parties scuppering a deal.
Monarch Alternative Capital, a hedge fund in the United States, last month won a $45.5 million legal case against Drydocks as it had defaulted on its debts and sought a restructuring.
Decree 57 would help push through the restructuring despite opposition from the minority group of investors.
According to lawyers, decree 57 contains many recognisable features of well-known English and US restructuring tools such as company voluntary arrangements and chapter 11 of the US bankruptcy code.
Drydocks’ application will be heard at 2 pm, according to a notice posted on the DIFC Courts' website.
The ship builder sought a restructuring of its debt in 2010, having overstretched on loans to expand overseas.
It is seeking to restructure two bank loans that were issued in 2008, one valued at $1.7bn and the other at $500m.
The $1.7bn loan came due in October, and the $500m loan matures next year.