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DP World still undecided about share offering option
DP World has not decided whether to go for a share offering but says it would not like to lose its "freedom to take quick decisions" in choosing a fin-ancing option.
- By Shakir Husain, Staff Reporter
- Published: 00:00 October 11, 2006
Dubai: DP World has not decided whether to go for a share offering but says it would not like to lose its "freedom to take quick decisions" in choosing a fin-ancing option.
There have been conflicting reports about DP World's speculated initial public offering (IPO), with some foreign newspapers suggesting that the company could list its shares in London and Dubai.
The London Observer recently reported that the company had shelved the London option.
DP World chairman Sultan Ahmad Bin Sulayem, however, insisted that no decision had been taken on a share offering.
"There are many ways of financing. We have not selected until today which method we are going to use," Bin Sulayem told reporters during a Ramadan event on Monday night.
He said the company would look at various funding options, including bank borrowings, bonds and an IPO.
DP World had asked Merrill Lynch, Deutsche Bank and Shuaa Capital to advise it on a possible IPO.
But Bin Sulayem suggested the IPO option was not at the top of the list of these options.
"Do we really need partners? An IPO means you are going to have partners, you are not going to have freedom. Now we have the freedom to make quick decisions," he said.
DP World's chief financial officer Yuvraj Narayan was recently quoted by a news agency as saying that the company was committed to an IPO by January 2008.
DP World's parent organisation Ports Customs and Free Zone Corporation (PCFC) this year raised $3.5 billion in a two-year sukuk issue to fund the $6.8-billion purchase of P&O.
The Dubai International Financial Exchange-listed bond's convertible structure allows partial redemption of up to 30 per cent in the form of equity shares of the subsidiaries of PCFC as and when they go for an IPO within two years.
"We are committed to make payments to the banks certainly before that date. That means it could be an IPO, it could be a bond, it could be another source of funding, it could be privately injected money," Bin Sulayem said.
"The end result is that we need to meet our expected payments to the banks. We have no problem doing that," he added.
If no share offering is made before the final redemption date, investors will be compensated with a higher yield.
Bin Sulayem refused to provide details of the impending sale of P&O's US assets.
The sale is being handled by Deutsche Bank and unconfirmed reports have said that up to eight parties have offered bids.
Ted Meyer, a Deutsche Bank spokesman in the US, also refused comment.
Under an agreement with the US government, P&O Ports North America's operations have been isolated from DP World, Bin Sulayem said.
"We have no say in it, we have no interference. The bank is negotiating the sale on our behalf," he said, describing the issue as "complicated" as P&O has terminal and logistics operations in a total of 22 ports in the US.
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