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Home  The Gulf in The Press UAE port giant floats 17 percent stake
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UAE port giant floats 17 percent stake |
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Sunday, 04 November 2007 |
DUBAI (AFP) — Dubai port operator DP World on Sunday launched an initial public offering for 17 percent of its shares in one of the biggest ever flotations in the Gulf region. The company, one of the world's largest container-port operators, said at a news conference it was selling 2.822 billion shares, or 17 percent of its 16.6 billion shares, at an indicative price of one dollar to 1.30 dollar per share.
The offer, which could be expanded to up to 20 percent of the firm's shares, is open to citizens and residents of the United Arab Emirates and its Gulf Arab partners Bahrain, Kuwait, Oman, Qatar and Saudi Arabia.
The shares will also be offered globally to some institutional investors.
The announced indicative share price range would make the company worth anything from 16.6 billion to 21.58 billion dollars.
Shares will remain on sale until November 15 and are expected to list on the Dubai International Financial Exchange shortly afterwards.
"The indicative price range reflects DP World's strong reputation internationally and confidence in its future," the company's executive vice chairman, Jamal bin Thaniah, said in a statement.
DP World, which is controlled by the government of the booming Gulf emirate of Dubai, a UAE member, became a top global port operator when it acquired Britain's Peninsular and Oriental Steam Navigation Co in 2006 in a 6.9-billion-dollar deal.
But the company had to relinquish the US part of that acquisition following fierce congressional opposition to the deal on security grounds and despite having the support of President George W. Bush.
The company says it is the fourth largest marine terminal operator in the world and owns 42 terminals across 22 countries.
On October 31, the company announced it had moved into the Egyptian maritime market for the first time, buying a 90 percent stake in a container port operator for 670 million dollars.
The largest public offer in the region so far was when Saudi Telecom raised more than four billion dollars in its first-ever IPO in 2003.
DP World previously raised 3.5 billion dollars by issuing convertible Islamic bonds in January 2006 with a January 2008 maturity date.
At the end of 2006 it had a gross capacity of 48.6 million twenty-foot equivalent units (TEU), with a gross throughput of 36.8 million TEU last year.
The company says it is growing faster than the market, with volumes rising around 18 percent in 2006 compared with market growth of approximately 11 percent.
The launch of DP World's IPO came after another of Dubai's major government-owned firms reportedly indicated it might offer its shares to investors.
The chairman of Emirates airline, Sheikh Ahmed bin Saeed al-Maktoum, told The Times of London last month the DP World IPO was a "very positive thing. I think for sure Emirates will also, in the future, do something like that."
The newspaper said the IPO could value the carrier, the fastest growing airline in the Middle East, at up to 20 billion dollars.
Dubai is also aggressively expanding its global holdings.
Government-controlled or backed firms and investment funds have chased strategic targets such as European aerospace giant EADS, owner of Airbus, in which Dubai International Capital bought a 3.12-percent stake, and brand names like the upscale Barneys New York retail chain, which Istithmar, another investment arm of the emirate, wrested from a rival Japanese bidder.
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