DP World and investment group CDPQ have announced an investment of US$5bn in three of the port operator’s flagship UAE assets, consisting of Jebel Ali Port, the Jebel Ali Free Zone and the National Industries Park.
CDPQ will invest US$2.5bn in the trio through a new joint venture in which it will hold a stake of approximately 22%, with the remainder of the transaction being financed by debt.
Other long-term investors will have the opportunity to acquire an additional stake of up to US$3bn.
The transaction implies a total enterprise value of approximately US$23bn for the three assets.
Sultan Ahmed Bin Sulayem, group chairman and CEO, DP World, said: “We believe this new partnership will enhance our assets and allow us to capture the significant growth potential of the wider region.”
He explained that the transaction would help towards DP World’s objective to reduce its net leverage to below 4x Net Debt to EBITDA, despite the challenges of the pandemic and recent global economic conditions.
Among the assets featured, Jebel Ali Port is the world’s second largest port outside East Asia, catering to vessels serving the East-West trade corridor.
Jebel Ali Free Zone is the largest free zone in the Middle East, hosting companies from 140 countries, including approximately 150 Fortune 500 enterprises.
Meanwhile, the National Indusries Park is a 21 sq km area designed for manufacturing and processing companies.
“The significant strengthening of our balance sheet, the continued resilience of our business, diversity in our portfolio and continued focus on supply chain solutions will support our target of achieving a strong investment-grade rating for the Group,” added Bin Sulayem.
“Overall, we believe this transaction provides a strong platform for the UAE assets to meet their long-term growth objectives, while the stronger balance sheet supports the Group’s wider end-to-end supply chain solution strategy, which will drive sustainable value for all DP World stakeholders,” he continued.
Emmanuel Jaclot, executive vice-president and head of infrastructure at CDPQ, said: “DP World is well positioned to provide innovative solutions to their customers worldwide, and we welcome this opportunity to invest in a best-in-class group of infrastructure that provides CDPQ with exposure to new fast-growing markets and trade routes in Africa and South Asia.”
Tranche 1 (US$5bn) of the transaction is expected to close in the second or third quarter of 2022, and tranche 2 (up to US$3bn) is expected to close during the fourth quarter of 2022.
The three assets will remain fully consolidated businesses within the DP World Group, and day-to-day operations, customers, service providers and employees will not be affected according to the Dubai-based company.
