x Abu Dhabi, UAETuesday 25 July 2017

Dubai's Drydocks set to target energy sector

Drydocks World, which is on the verge of completing a restructuring of its debt, is seeking to expand into the energy sector with a string of innovative projects.

Khamis Juma Buamim, Chairman of Drydocks World and Maritime World. (Razan Alzayani / The National)
Khamis Juma Buamim, Chairman of Drydocks World and Maritime World. (Razan Alzayani / The National)

Drydocks World, the Dubai World subsidiary on the verge of completing a restructuring of its debt, is seeking to expand in the energy sector with a string of innovative projects.

Drydocks has convinced most of its 19 creditors to agree to a restructuring of loans totalling US$2.2 billion (Dh8.08bn) and that a deal will be signed off in the coming weeks.

"We are not worried about that, it is almost in the pocket, we are now completing the legal paperwork. Hopefully by mid-July you will have the announcement," said Khamis Juma Buamim, the Drydocks World chairman. The company managed to get more than the required two thirds of lenders to back the scheme, said Mr Buamim.

A minority of the creditors, including the hedge fund Monarch Alternative Capital, had resisted the restructuring, first sought by Drydocks in 2010.

Once the debt deal is complete the shipyard's focus will be on supplying and servicing the energy sector.

"We had to think seriously what would happen in the next 15 to 25 years, and we plotted it out. The data indicated that the only industry that has a growth cycle up to 2030 in some cases is the oil and gas and energy industry," said Mr Buamim.

Drydocks recently announced it had started construction on the turret for a floating liquefied natural gas Prelude project developed by Shell.

The 90m high, 11,500 tonne turret will be delivered to South Korea where it is to be installed on a ship that will eventually be permanently moored 200 kilometres off the coast of Kimberley in Western Australia.

The company also signed a contract to build the largest offshore wind farm structure yet, a platform 92 metres in diameter that will convert electricity produced by wind turbines off the shores of Germany.

The Dubai shipyard has also been commissioned to convert two tankers by oil companies active in the United States.

The ships will be able to mop up oil spills and will be deployed in the Gulf of Mexico in response to the Deepwater Horizon rig disaster that polluted US waters in 2010.

"In 2012, our main target is the redefinition of our business in Dubai from a repair shipyard to a multifunctional yard," said Mr Buamim.

Drydocks' operations in Singapore, meanwhile, will be placed into a holding company and strategic investors are being invited to buy into the structure to form a joint venture.

Since its debt issues hit the spotlight, Drydocks has financed its operations without recourse to the capital markets and it is now focused on bringing down its debt ratio of its various operations to a maximum of 35 per cent of the value of their assets.

"I know [our leverage] will be in the high for a while but we have to bring it all down to minimise the risk," said Mr Buamim. As part of this effort, the company is looking to introduce better cost management.

It is also working hard to upgrade its technology, allowing it to compete for a more diverse set of projects.

fneuhof@thenational.ae

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