Dubai: Port operator DP World said yesterday that it would reach into its cash reserves to pay back $3 billion (Dh11.02 billion) outstanding under its revolving credit facility due to mature in October. The repayments will take place between April 4 and 10.
As on December 31, 2011, DP World had $4.2 billion of cash balances, including cash flow generated from its portfolio of global terminals and the proceeds of the monetisation of the five terminals in Australia.
Following this $3 billion repayment, the group will have reduced total debt to approximately $4.7 billion and have cash balances of approximately $1.2 billion.
"We are delighted to be in a position to repay all outstanding $3 billion of our revolving credit facility six months ahead of maturity," Sultan Ahmad Bin Sulayem, DP World chairman, said in an e-mailed statement.
‘No liquidity crunch'
"DP World never had any liquidity problems and it is good news not only for the company but also for Dubai," Haissam Al Arabi, analyst at Gulf Mena investments, told Gulf News. He said that the company was always in a very good position.
In line with the cash repayments in early April, DP World will cancel $2 billion of the existing revolving credit facility, retaining a $1 billion undrawn facility.
This undrawn facility will be replaced by a new five-year revolving credit facility of $1 billion. "We are in the final stage of agreeing documentation with the banks that have committed to this new facility and expect it to replace the existing facility shortly," the statement said.
"The new facility will be used to provide DP World with flexibility to manage cash flow and investment in our portfolio. We have no immediate need to draw down the new facility.
"DP World has a very strong balance sheet, not least because of the strong cash generative nature of our global operations. We have created a balance sheet that allows DP World to meet the long-term strategic requirements for investment into profitable growth opportunities, whilst maintaining a very disciplined approach to capital allocation," Bin Sulayem said.
"We are very pleased to have put in place a new bank deal in the current market climate. Whilst we have no immediate plans to access the new facility, it allows us to draw down and pre-pay cash as needed, providing timely and flexible access to cash as we continue to invest in our global portfolio to deliver profitable growth," Group Chief Executive Officer Mohammad Sharaf said.
Boosting capacity
DP World, which operates more than 60 terminals across six continents, is expanding operations in China, India and the Middle East as it seeks to boost capacity to 100 million twenty-foot equivalent container units by 2020.
The company said in December it would invest $850 million in the next three years to increase capacity at its flagship Jebel Ali Port.
