DP World denies stake sale talks with Abraaj

STAKE TALKS: Reports say Abraaj Capital and DP World fail to agree terms on Abraaj taking stake. (Getty Images)

Port operator DP World said on Tuesday it is not involved in talks over a potential sale of a stake, and talks between its parent company and a regional private equity player were no longer ongoing.

"The board of DP World would like to reiterate previous statements that they have not been involved in any discussions in relation to a potential sale of a stake in the company," the Dubai-based firm said in a statement on Nasdaq Dubai's bourse.

"DP World has now been advised by Dubai World that these discussions are no longer ongoing," it added.

DP World issued the statement following a media report that Dubai-based private equity firm Abraaj Capital's five-month old talks to buy a stake in the firm collapsed after both companies failed to agree terms, citing bankers familiar with the deal.

Abraaj Capital was not immediately available for comment when contacted by Reuters.

DP World's shares were up 0.8 percent at $0.482 a share at 0622 GMT, having hit a 46-week closing high on Thursday.

Any potential sale may have been derailed by financing difficulties or by a restructuring at Dubai World, analysts said.

Dubai World, in June hired AlixPartners, the turnaround experts who are advising on the General Motors bankruptcy, to help restructure its business.

"Part of it is the financing, such a deal is going to be huge. So getting the finance for this is going to be really difficult, given the liquidity problems, and even the foreign banks are not that much (willing) to go in even as consortiums," said Samer al-Jaouni, general manager of Middle East Financial Brokerage Co.

Parent company Dubai World said in May it was in talks to sell a stake in the port operator after it was approached by a regional private equity firm to sell a minority stake.

Dubai World said on Friday the chief executive of its Istithmar World unit, David Jackson, would continue to lead the firm, after reports his position was under review.

Dubai World has $59bn of liabilities, a large proportion of the Gulf emirate's total debt.

The company, which owns US luxury chain Barney's New York, in August hired an advisory firm to help it mull options to shore up Barney's financial position.

UBS upgraded DP World to "buy" from "neutral," and said it was poised to benefit from a strong recovery of global trade in 2010. (Reuters)

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