Dubai's DP World sells 75 percent Australia stake

AFP, Wednesday 22 Dec 2010

Dubai World will receive $1.5 billion from the transaction with the aim of reducing its debt

Dubai ports operator DP World said Wednesday it has agreed to sell 75 per cent of its stake in DP World Australia for $1.5 billion, as its debt-laden parent firm vies to reduce it liabilities.


"The total proceeds to be received by DP World will be approximately 1.5 billion Australian dollars ($1.5 billion)," it said.

It said it aimed to reduce its debt through the sale, which will be completed towards the end of the first quarter of 2011, subject to regulatory approvals.

"The total proceeds will go towards reducing DP World’s net debt as part of our overall strategy to improve balance sheet flexibility," it said.

DP World is considered the most profitable unit of the debt-laden Dubai World, which is owned by the Dubai government and agreed with its creditors in September to restructure about $24.9 billion of debt.

Banks agreed to reschedule around $14.4 billion of debts over five and eight years. The deal averted a distress sale of its wide range of foreign assets.

On Monday, the newly appointed chairman of Dubai World, Sheikh Ahmed bin Saeed al-Maktoum, renewed the company's pledge to meet its debt obligations.

DP World Australia operates container terminals in Adelaide, Brisbane, Fremantle, Melbourne, and Sydney.

It has a capacity to handle in excess of 3.5 million TEU (twenty-foot equivalent unit) per annum, approximately 50 per cent of the total Australian container market, the statement said.

In 2009, DP World Australia generated equity-adjusted earnings of 96 million Australian dollars, before deducting interests, tax, depreciation and amortisation.

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