DP World to Delist From Nasdaq Dubai in Privatization Deal

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Published Feb 20, 2020 6:09 PM by The Maritime Executive

Global port operator DP World will soon be privatized in a $14 billion dollar deal with the government of Dubai's state investment fund Dubai World. 

Port and Free Zone World, a division of Dubai World, already owns 80 percent of DP World. As part of the deal, it will buy the remaining 20 percent of DP World shares that are publicly listed on Nasdaq Dubai, paying a 30 percent premium over last week's market prices, and DP World will be delisted. 

DP World will borrow about $8 billion to finance the transaction, and $5 billion of this amount will be passed on to Dubai World as a dividend to help it to pay its lenders, according to an exchange filing. 

In a statement, DP World said that its long-term capital requirements did not align with the short-term priorities of public stock market investors, and that going private would free it to pursue its long term strategy. 

“The global ports and logistics industry has been undergoing a significant transition as a result of the consolidation of the customer base and the vertical integration of several competitors. DP World must be able to continue responding effectively to this rapidly changing landscape and to invest in the future," said CEO Sultan Ahmed bin Sulayem. "Returning to private ownership will free DP World from the demands of the public market for short-term returns, which are incompatible with this industry, and enable the company to focus on implementing our mid-to-long-term strategy to build the world’s leading logistics provider."

Moody's and Fitch both intend to review DP World's credit rating this week due to the large new round of borrowing.