DP World investigates IPO

Ports operator DP World may consider selling shares in the company through an initial public offering (IPO) as one of the options for financing its worldwide expansion, chairman Sultan Ahmed bin Sulayem has said.

Sulayem said DP World, the world's third-largest container port operator, would also seek other financing methods such as loans or bonds, opting for the most cost-effective option, UAE daily Gulf Today reported on Tuesday.

The chairman’s comments follow a report in Middle East Economic Digest (Meed) that the company may this year sell $2 billion of shares through an IPO.

DP World may list the shares on the Dubai International Financial Exchange (DIFX), unidentified analysts close to the port operator said, according to the London-based weekly magazine.

DP World has been looking into selling shares through an IPO for some time now, and the company has always said a public listing is something it is considering, but that no decision has yet been made.

However, DP World does has ambitious global expansion plans that will need financing, whether through an IPO or bond issuance.

The company plans to develop container-port operations in 12 countries, including France and Peru, and expand facilities in nine more by the end of 2011.

Last year DP World hired Deutsche Bank and Merrill Lynch to advise on a possible IPO, and in April the company reportedly asked Deutsche Bank and Dubai-based investment bank Shuaa Capital to review its financing options, including a possible stock market listing or a refinancing.

In January last year DP World's parent, the Ports Customs and Free Zone Corporation (PCFC) sold $3.5 billion of two-year Islamic bonds, or sukuk, which investors can convert into shares in any IPO by one of its subsidiaries.

According to Gulf Today, Sulayem also said DP World, part of state-owned holding company Dubai World, is continuing to look at investment opportunities in the US, despite the controversy that erupted when the operator acquired terminal operations at a number of American ports through its $6.85 billion purchase of UK-based P&O last year.

The acquisition of operations at six US ports through the deal caused uproar in the US over perceived security concerns.

DP World later sold its operations in the six ports to AIG Global Investment Group to quell the controversy.

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