Reuters reported that Drydocks World proposed USD 2.2 billion loan deal with lenders expected to be completed by the end of April may not be reached this year.

Mr Khamis Juma Buamim chairman of Drydocks World said that “Discussions with banks are still ongoing and it has not been completed yet. I can’t confirm if we will reach a restructuring agreement this year.”

Dubai World’s shipbuilding unit is restructuring USD 2.2 billion facilities taken in October 2008. The loan comprises USD 1.7 billion 3 year loans and 5 year USD 500 million loan.

The Dubai based ship and rig builder said earlier this year that it expected to complete the restructuring by April 30th 2011 and had agreed on the headline terms with banks. The talks with lenders are also aimed at making provisions for a new long term working capital facility.

Mr Buamim said that some points still need to be clarified with the banks. Bookrunners on the 15 lender syndicate were BNP Paribas, HSBC, Mashraq, Standard Chartered and Lloyd TSB Bank among others. Dubai World, the Gulf emirate’s flagship conglomerate which has itself restructured USD 25 billion in debt has said Drydocks World is not part of its own restructuring as it had sufficient financial capacity to service its own debt.

A Dubai based banking source said that limitless, a Dubai World real estate arm has rolled over USD 1.2 billion loan owed to one syndicate of banks several times. Drydocks restructuring will be a tough one to negotiate purely because of the mixture of lenders in the consortium. The lenders include a number of foreign banks. The loan is also actively traded in the secondary market and we have seen interest from the foreign banks to offload their positions. Drydocks World signed a new USD 200 million credit facility in January.

(Sourced from Reuters)