DP World, the world’s fourth-biggest port operator, has begun talks with banks for a loan to help repay half of a $3bn credit facility that matures in October, a banker familiar with the talks said.
The Dubai World-controlled company is talking to HSBC Holdings Plc, Standard Chartered and Citigroup for a new $1.5bn loan, the banker said, declining to be identified because the information is private.
It will pay the remaining $1.5bn with its own cash, he said. DP World raised a revolving credit facility in October 2007 at a margin of 45 basis points over the London interbank offered rate, according to data compiled by Bloomberg.
A spokeswoman for DP World could not be reached for a comment. Officials for HSBC, Standard Chartered and Citigroup in Dubai declined to comment.
DP World, which operates more than 60 terminals across six continents, is expanding operations in China, India and the Middle East as it seeks to boost capacity to 100 million twenty-foot equivalent (TEU) container units by 2020, according to its website.
The company said in December it will invest $850m in the next three years to expand capacity at its flagship Jebel Ali port in Dubai.
Dubai and its related companies shoulder $129.3bn of debt, amounting to 149 percent of GDP, of which $15.5bn is due this year, according to Bank of America Merrill Lynch estimates.
The emirate, home to the world’s tallest tower and palm-shaped islands, borrowed the money during a regional economic boom to turn itself into a financial, trade and tourist hub.
DP World handled 54.7 million TEUs at its ports last year compared with 49.6 million TEUs a year earlier, it said January 31. It forecast full-year gross profit to be “in line with expectations” on the back of a 10 percent increase in container volumes last year.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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