Dubai: DP World and CDPQ, a global investment group, announced an investment of $5 billion in three of DP World’s flagship UAE assets, on Monday.
CDPQ will invest $2.5 billion in the Jebel Ali Port, the Jebel Ali Free Zone and the National Industries Park through a new joint venture in which it will hold a stake of approximately 22 per cent, with the remainder of the transaction being financed by debt.
Other long-term investors will have the opportunity to acquire an additional stake of up to $3 billion.
The transaction implies a total enterprise value of approximately $23 billion for the three assets.
Tranche 1 ($5 billion) of the transaction is expected to close in the second or third quarter of 2022, and tranche 2 (up to $3 billion) is expected to close during the fourth quarter of 2022.
The Jebel Ali Port, Free Zone and National Industries Park form an ecosystem for the supply and logistics chains of over 8,700 companies from around the world, serving more than 3.5 billion people globally. The three assets generated pro-forma 2021 revenue of $1.9 billion.
“The transaction also achieves our objective of reducing DP World’s net leverage to below 4x net debt to EBITDA and this has been achieved despite the challenges of the pandemic and recent global economic conditions,” said Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World.
“The significant strengthening of our balance sheet, the continued resilience of our business, diversity in our portfolio and continued focus on supply chain solutions will support our target of achieving a strong investment-grade rating for the group.”
Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure at CDPQ, said “DP World is well positioned to provide innovative solutions to their customers worldwide, and we welcome this opportunity to invest in a best-in-class group of infrastructure that provides CDPQ with exposure to new fast-growing markets and trade routes in Africa and South Asia”.