Abu Dhabi Ports eyes $1bn bond in 2011 Q1

State owned Abu Dhabi Ports Company (ADPC) may sell up to $1 billion in bonds early next year to finance the Khalifa Port & Industrial Zone (KPIZ) in Abu Dhabi, its chief financial officer said on Monday.

ADPC has appointed National Bank of Abu Dhabi as financial advisor to draw up a long term financial strategy. Arrangers for the bond have yet to be appointed.

Speaking to Reuters, Ala Khannak said: "One of our options is a sukuk or bond in the first quarter of 2011 of about $1 billion."

In a telephone interview, Khannak said the ports operator is working closely with Abu Dhabi's Debt Management Office.

Abu Dhabi, capital of the UAE, is investing billions of dollars in infrastructure, real estate and tourism to diversify its economy away from oil.

ADPC, which also manages the existing Mina port, is not immediately in need of cash.

He said: "We are comfortable with our cash flows as well as funding from banks, export credit facilities and equity from the government."

ADPC is developing the $2.18 billion KPIZ project, located midway between Abu Dhabi and Dubai in Taweelah.

The first phase will be operational in fourth quarter 2012 with initial capacity of 2 million TEUs (twenty foot equivalent units) and 9 million tonnes of cargo.

The KPIZ will be built over five phases and ADPC is also developing smaller ports in Abu Dhabi.

By 2030, when all phases of the new port are completed, its capacity will be 15 million TEUs and 35 million tonnes cargo, Mohamed al Shamsi, Port Unit Vice President of KPIZ told a conference in March.

The port would then contribute up to $22 billion of Abu Dhabi's GDP in 2030, he said.

Funding for the next phases is yet to be finalised but it will comprise a mix of syndicated bank loans, bilateral facilities, export credit agency finance, Islamic finance and debt capital markets, Khannak said.

Several state backed entities and banks from Abu Dhabi have been tapping the bonds market after banks tightened lending following the global crisis as well as the debt standstill by Dubai World. (Reuters)