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Dubai Ports eyes IPO among financing options

DUBAI - Dubai government-owned port operator DP World said on Thursday it was considering an initial public offering as part of an annual review of financing needs and would decide on the cheapest way to raise the cash.

The world’s third-largest container port operator plans to sell 20 percent of its shares to the public this year to raise as much as $4.2 billion to finance growth, a person familiar with the plan told Reuters on Sept. 11.

DP World Chairman Sultan bin Sulayem said on Thursday the company still had to decide whether to proceed with an IPO or to finance expansion through loans, bonds or existing resources.

“It will depend on what is cheapest and most appropriate. No decision has been made,” he told Reuters by telephone. He declined to comment on how much DP World was looking to raise.

A second person familiar with the IPO plan said on Thursday that DP World was planning to sell a stake of around of 20 percent but could not give the value of the deal.

The company considers an IPO among its financing options every year, Sulayem said, dismissing suggestions that a global credit crisis triggered by US mortgage defaults would make a share sale more likely this year.

“We are a large company and not necessarily affected by these things,” he said.

A meltdown in the US home-loan market for people with poor credit made banks more reluctant to lend, drove up the cost of corporate borrowing world-wide and forced companies to delay bond sales.

DP World, which last year bought UK-based port operator P&O for $6.8 billion, would list on the Dubai International Financial Exchange (DIFX), the person familiar with the situation, who did not want to be identified, said on Sept. 11.

The company is worth about $22 billion, that person said, adding the plan needed approval from the Dubai government.

Dubai Islamic Bank and Deutsche Bank, two of four banks advising DP World on a possible IPO, declined to comment.

Other advisers are Merrill Lynch & Co Inc and Dubai-based Shuaa Capital.

Dubai set up the DIFX in 2005 to operate according to international regulatory standards in order to encourage local companies to sell shares to the public.

Dubai agreed last month to sell a 33 percent stake in DIFX to the Nasdaq Stock Market Inc under a deal that would give the US bourse operator control of Nordic exchange company OMX.