Dubai-based port operator DP World to delist, return to full state ownership

Aerial view of Dubai, UAE. Photo: Alex Block/unsplash

Dubai’s DP World, one of the world‘s largest port operator’s, said on Monday it would delist and return to full state ownership in a deal valuing the company at $13.9 billion.

DP World operates ports around the world, from Hong Kong to Buenos Aires, and is headquartered at its flagship Jebel Ali Port in Dubai, the Middle East’s biggest transhipment hub.

Port and Free Zone World, a wholly-owned subsidiary of state investment vehicle Dubai World, is to acquire the 19.55% of shares listed on the Nasdaq Dubai, according to a stock filing.

Port and Free Zone World already owns 80.45% of ordinary share capital of DP World.

Each listed share will be acquired for $16.75, a 28.8% premium on Sunday’s closing price of $13 a share.

Port and Free Zone World will finance the transaction in new facilities arranged by Citibank and Deutsche Bank, the filing said.

Port and Free Zone World will also provide $5.15 billion in funds to Dubai World, helping it meet outstanding obligations to lenders so that DP World can implement its strategy without restrictions, it said.

Dubai World subsidiaries face certain restrictions due to agreements it has with creditors. DP World had been exempt from those restrictions as long as it was listed.

Proceeds will also be used to allow DP World to fund the potential redemption of its convertible bonds, the filing said.

DP World is delisting to focus on its medium-to-long-term strategy of becoming “the world’s leading logistics provider,” said Chairman Sultan Ahmed bin Sulayem.

The port operator, which listed on the Nasdaq Dubai in 2007, has diversified its operations in recent years to include industrial parks, transportation, and other logistic services assets.

“The demands of the public market for short term returns … are incompatible with this industry,” said bin Sulayem.

Port and Free Zone World intends to maintain DP World‘s governance structure, the filing said.

DP World shares surged 9.62% after it announced it would delist, but they had lost more than a quarter of value over the past year.

The port operator blamed the U.S.-China trade war and regional geopolitics for causing uncertainty last year, with gross container volumes through its ports contracting 0.2%.

The operator was valued at $4.96 billion when it listed in 2007. It was also listed on the London Stock Exchange between 2011 and 2015.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.