Dubai World unit sued by US-based hedge fund - FT.com

A US-based hedge fund has launched legal action against Dubai’s Drydocks World for repayment of about $45.5m after the unit of troubled conglomerate Dubai World defaulted on loans in August, threatening to reignite debt fears in the Gulf emirate.

Monarch Alternative Capital is suing the ship-repair company in the High Court of London, according to a filing, after more than a year of talks between Drydocks and its creditors have so far failed to reach agreement on restructuring debts of $2.2bn.

The brewing legal battle will refocus attention on the challenges Dubai faces in dealing with maturing debts of about $14bn next year, after it finalised the restructuring of Dubai World’s $25bn, the most troublesome portion of its $110bn debt pile.

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