Dubai: DP World, one of the world’s largest port operators, has agreed to buy Dubai industrial and logistics infrastructure firm Economic Zones World (EZW) for $2.6 billion (Dh9.5 billion) in the latest shuffle of assets among the emirate’s state-linked companies.
Both firms are majority owned by Dubai World, the state-owned conglomerate which agreed to a $25 billion debt restructuring in 2011.
DP World’s purchase of EZW includes the assumption of net debt of $859 million, the port operator said on Thursday. EZW has five business units including Jebel Ali Free Zone and JAFZA Enterprises.
A statement from DP World said the acquisition, which needs shareholder approval, would increase its earnings by 15 per cent and generate a return of more than 7 per cent on capital employed in its first full financial year.
The purchase will be funded from existing cash and existing conventional and murabaha term loan and revolving facilities. An existing $650 million bond issued by Jebel Ali Free Zone and due in 2019, and an Islamic loan which it has taken out, will remain outstanding although DP World may explore financing options.
Separately, DP World said it was seeking shareholder approval to delist its shares from the London Stock Exchange, while it would maintain its NASDAQ Dubai listing.
The London listing is thinly traded, partly because of its small free float, while liquidity in Dubai markets has been increasing in the past two years. Delisting is expected to take effect on or about January 21, the port operator said.
