DP World in landmark IPO

Dubai will sell around 20% of port operator DP World next month in an initial public offering (IPO) that could be the Middle East's largest and value the company at about $20 billion.

DP World, which was the world's fourth-largest container terminal handler in 2006, will list shares on the Dubai International Financial Exchange on November 26 after an international book-building process, the company's parent said.

The IPO will open on November 4 when DP World will give investors an indicative price range for the shares, Dubai World said in a statement, without saying how much it was looking to raise.

The IPO would value the company at between $19 billion and $20 billion, a person familiar with the matter told Reuters.

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

"Today marks another step in the development of DP World from a local, to a regional, to a global player," Dubai World Chairman Sultan Bin Sulayem said told reporters.

Some of the cash from the IPO would be used to pay back Islamic bonds, Sulayem said.

Bonds in Dubai's Ports, Customs & Free Zone Corp (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.

Another person familiar with the plan told Reuters last month that DP World was planning to raise as much as $4.2 billion by selling about 20% of its shares before the end of the year.

That would surpass the $2.72 billion Saudi Telecom raised in its public share sale in 2003 as the Middle East's largest IPO. Saudi Telecom also sold some shares to government funds taking the total raised to $4.08 billion.

DP World runs 42 terminals and 13 new developments across 27 countries from the Americas to Asia. Last year, it helped move 36.8 million containers, according to a June prospectus for the sale of bonds.

Almost half of the throughput was at ports in the UAE, the Middle East, Europe and Africa. Another 43% was at ports in the Asia-Pacific and South Asia regions, according to the prospectus.

Last year, it generated profit of $191.78 million and revenue of $3.49 billion. - Reuters