DP World Sells 75 Percent of Australian Ports to Citi for $1.5 Billion
DP World and Citi Infrastructure Investors form strategic partnership in Australia
Dubai, UAE - DP World Limited and Citi Infrastructure Investors (CII), together with one of CII’s major investors, have today formed a strategic partnership to invest in, operate and manage DP World’s five marine terminals in Australia. DP World has entered into an agreement to provide management services to the Australian operation to continue to provide a consistently high level of service to our customers. Management and staff of DP World Australia will be retained.
DP World Australia operates container terminals in Brisbane, Sydney, Melbourne, Adelaide and Fremantle with capacity to handle in excess of 3.5 million TEU per annum, approximately 50% of the total Australian container market. For the twelve months to 31 December 2009, DP World Australia generated equity-adjusted EBITDA of A$ 96 million.
This transaction, which will see DP World monetise 75% of its shares in DP World Australia, values DP World Australia at an enterprise value of A$ 1,817 million at closing.
The total proceeds to be received by DP World will be approximately A$ 1.5 billion (USD 1.5 billion) including the repayment of certain intercompany balances owing from DP World Australia to DP World Limited. The total proceeds will go towards reducing DP World’s net debt as part of our overall strategy to improve balance sheet flexibility.
Completion, subject to regulatory approvals, is expected towards the end of the first
quarter of 2011.
Mohammed Sharaf, CEO DP World said:
“We are delighted that Citi Infrastructure Investors are joining us as strategic partners in Australia. We share a long term commitment to invest in and grow our terminals in the region over the long term, and together we look forward to building on our successful track record of operating container terminals in the region.
“DP World has been operating terminals in Australia for over five years during which time all our terminals have undergone significant upgrades including investment in new quay side cranes to improve efficiencies for our customers. Our commitment to the region has been recognized with the recent renewal of long-term concessions in Adelaide, Brisbane and Sydney.”
Yuvraj Narayan, CFO of DP World commented:
“This strategic partnership provides a great opportunity for DP World to remain actively involved in Australia whilst delivering on our strategy to monetise assets as part of DP World’s ongoing goal to reduce leverage and focus on higher margin markets.
“This transaction, including the benefits of the long-term management contract, will be earnings accretive for DP World from the time of completion.”
Felicity Gates, Co-Head of Citi Infrastructure Investors, said:
"Australia is a key market for Citi Infrastructure Investors where we have been working for some time. We are delighted to be entering into a strategic partnership with DP World. The partnership represents an attractive investment opportunity in an important and growing market."
Holly Koeppel, Co-Head of Citi Infrastructure Investors and chairperson elect of DP World Australia, said:
"We look forward to working with DP World's team in Australia and we are committed to ongoing investment in the business to ensure that DP World Australia continues to offer customers the highest level of service and is well positioned to meet future growth opportunities in this attractive market." DP World is advised by Deutsche Bank AG and Citigroup Global Markets. CII is advised by HSBC and UBS.