Drydocks World plans to raise $2.2bn loan
The $2.2 billion (Dh 8.07bn) fundraising plan by Drydocks World – the shipbuilding and repairing arm of Dubai World – will aid the firm in consolidating some of its latest acquisitions, revealed a senior official.
The company has hired eight banks to help it borrow the amount to refinance outstanding loans it used to pay for two acquisitions in Singapore and to put a firm hand on its recent acquisitions.
It has initiated meetings with potential lenders in Dubai, London, Hong Kong and Singapore to get a $1.7bn three-year loan and a $500 million five-year loan.
"We have two debts running together from the acquisitions we made, and the fund-raising is to consolidate them. We are hoping to change from bridge to term loans," said Geoff Taylor CEO of Drydocks World.
Taylor verified recent reports revealing the fund-raising push, but while he managed to confirm the overall amount sought, he declined to verify the other figures.
Eight banks – BNP Paribas, DBS Bank, Emirates Bank, HSBC, ING Bank, Lloyds TSB Bank, Mashreqbank and Standard Chartered Bank – are launching a global syndication for Drydocks World. Banks may lend in US dollars, Singapore dollars or UAE dirhams.
Drydocks World has funded its purchases mostly with bank loans, including a $1.7bn syndication loan, which it launched in November last year from banks led by BNP, DBS, Emirates NBD and Lloyds TSB. The loan matures on August 27.
"We carry a lot of debt, but the debt is weighed against the business potential. We are a very strong group and a lot of banks are quite willing to work with us," Taylor said.
He said Drydocks World saw its revenue and profit grow 25 per cent year-on-year in 2007, but declined to give any figures.
Although Dubai Ports World (DPW), a sister company to Drydocks World raised almost $5bn in November in Middle East's biggest IPO, Taylor said there were no immediate plans for listing Drydocks World.
"It is always a possibility, but I suspect if that were to happen it would be a couple of years down the road from now," he said.
Drydocks World last year said it paid $2.2 bn to buy Pan-United Marine Ltd and Labroy Marine Ltd to gain ships and Asian shipbuilding sites as it expands outside the Middle East. The company is now eyeing yards in China, India and Vietnam to expand capacity in the hot business of rig building with oil at records of $150 a barrel and plans to invest $200m in new acquisitions this year.
"We have big overall expansion plans – right now we are looking at more places in China, in India and Vietnam," said Taylor. "Any potential acquisitions in Europe and the Americas will be down on our list of priorities," he added.
Drydocks World is developing another ship and rig-building yard on a 200-hectare site in Batam that was bought in November from Indonesian authorities. The yard is due to begin operations by 2010.
With the Drydocks yard at home running at virtually full capacity and little land left for further expansion, Taylor said the purchases in Southeast Asia were aimed at securing scarce docking space and beefing up offshore rig building capacity.
Currently it builds ultra large crude carriers, converts tankers into floating production vessels and builds floating offshore rigs to explore and drill for oil.
Dubai World, the parent company to Drydocks World has long been on a global shopping spree, taking up huge stakes in ports, airlines, office buildings and casinos, mostly in the West.
Taylor said Drydocks World expects strong competition in Singapore, home to the world's number one and number two offshore oil-rig builders Keppel Corp and SembCorp Marine. Both yards together own about one-third of all offshore rigs under construction.
The company has hired eight banks to help it borrow the amount to refinance outstanding loans it used to pay for two acquisitions in Singapore and to put a firm hand on its recent acquisitions.
It has initiated meetings with potential lenders in Dubai, London, Hong Kong and Singapore to get a $1.7bn three-year loan and a $500 million five-year loan.
"We have two debts running together from the acquisitions we made, and the fund-raising is to consolidate them. We are hoping to change from bridge to term loans," said Geoff Taylor CEO of Drydocks World.
Taylor verified recent reports revealing the fund-raising push, but while he managed to confirm the overall amount sought, he declined to verify the other figures.
Eight banks – BNP Paribas, DBS Bank, Emirates Bank, HSBC, ING Bank, Lloyds TSB Bank, Mashreqbank and Standard Chartered Bank – are launching a global syndication for Drydocks World. Banks may lend in US dollars, Singapore dollars or UAE dirhams.
Drydocks World has funded its purchases mostly with bank loans, including a $1.7bn syndication loan, which it launched in November last year from banks led by BNP, DBS, Emirates NBD and Lloyds TSB. The loan matures on August 27.
"We carry a lot of debt, but the debt is weighed against the business potential. We are a very strong group and a lot of banks are quite willing to work with us," Taylor said.
He said Drydocks World saw its revenue and profit grow 25 per cent year-on-year in 2007, but declined to give any figures.
Although Dubai Ports World (DPW), a sister company to Drydocks World raised almost $5bn in November in Middle East's biggest IPO, Taylor said there were no immediate plans for listing Drydocks World.
"It is always a possibility, but I suspect if that were to happen it would be a couple of years down the road from now," he said.
Drydocks World last year said it paid $2.2 bn to buy Pan-United Marine Ltd and Labroy Marine Ltd to gain ships and Asian shipbuilding sites as it expands outside the Middle East. The company is now eyeing yards in China, India and Vietnam to expand capacity in the hot business of rig building with oil at records of $150 a barrel and plans to invest $200m in new acquisitions this year.
"We have big overall expansion plans – right now we are looking at more places in China, in India and Vietnam," said Taylor. "Any potential acquisitions in Europe and the Americas will be down on our list of priorities," he added.
Drydocks World is developing another ship and rig-building yard on a 200-hectare site in Batam that was bought in November from Indonesian authorities. The yard is due to begin operations by 2010.
With the Drydocks yard at home running at virtually full capacity and little land left for further expansion, Taylor said the purchases in Southeast Asia were aimed at securing scarce docking space and beefing up offshore rig building capacity.
Currently it builds ultra large crude carriers, converts tankers into floating production vessels and builds floating offshore rigs to explore and drill for oil.
Dubai World, the parent company to Drydocks World has long been on a global shopping spree, taking up huge stakes in ports, airlines, office buildings and casinos, mostly in the West.
Taylor said Drydocks World expects strong competition in Singapore, home to the world's number one and number two offshore oil-rig builders Keppel Corp and SembCorp Marine. Both yards together own about one-third of all offshore rigs under construction.