DP World rating unaffected by IPO

The DP World share sale could be the biggest IPO in Middle East history. (Getty Images)

Dubai’s plan to sell a 20% stake in DP World next month in an initial public offering (IPO) will have no impact on the ports operator’s ‘A1’ credit rating and its outlook remains stable, ratings agency Moody’s Investors Service said on Monday.

State-owned parent company Dubai World on Sunday said it will list shares in DP World on the Dubai International Financial Exchange (DIFX) on November 26 in what could be the Middle East's largest IPO and value the company at about $20 billion.

”We have factored a potential monitory sale of the company into our ratings from day one, and with this expected to be around 20%, DP World remains controlled by the government,” Philipp Lotter, lead analyst for DP World at Moody's, said in a statement.

"The IPO is also likely to contribute to corporate transparency and will subsequently benefit holders of its bonds and Sukuk.”

Moody's said it views DP World as a government-related issuer and predicts that high government support will be extended to the company due to its important role in facilitating Dubai's maritime transportation and trade sectors.

Sunday’s announcement finally brought to an end speculation over what has been one of the most talked about listings in Middle East history.

DP World, the world’s fourth-largest container port operator, 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 had been made.

The IPO will open on November 4 when DP World will give investors an indicative price range for the shares.

Dubai World has not said how much it is looking to raise, but sources have said it could be as much as $4.2 billion.

If correct, it will surpass the $2.72 billion Saudi Telecom raised in its public share sale in 2003 as the Middle East's largest IPO.

The sale of existing shares will close on November 15 and will be open globally to institutional investors, nationals of the six Gulf Arab states and residents of the UAE.

Some of the money from the IPO will be used to pay back Islamic bonds.

Bonds in Dubai's Ports, Customs & Free Zone (PCFC), which are convertible into shares in any DP World IPO, have been rising on growing interest in owning stock in the company.

PCFC sold $3.5 billion of Islamic bonds to help finance DP World's $6.8 billion acquisition last year of British rival P&O.

Print | Email | Discuss this article |

READERS' COMMENTS

View all comments (0)

Have your say

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Security Code *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM