Dubai: DP World, the global ports operator, said on Thursday it intends to buy Dubai industrial and logistics park firm Economic Zones World (EZW) for $2.6 billion. In a separate move the company announced plans to delist from the London Stock Exchange (LSE).
Both DP World and EZW are majority owned by Dubai World, the state-owned corporation that has been in talks this year to reshuffle debt. In 2011, Dubai World restructured $25 billion in debt in the fallout of the global financial crisis.
DP World will take on $859 million of EZW debt under the acquisition, said Yuvraj Narayan, the port operator’s chief financial officer, on Thursday. EZW has five units including Jebel Ali Free Zone, which is adjacent to DP World’s flagship Jebel Ali Port.
Sultan Ahmad Bin Sulayem, DP World chairman, said the port operator has moved to acquire EZW to protect against the risk of third part ownership of Jebel Ali Free Zone.
While Bin Sulayem said he was not aware of any third party bids for the neighbouring free zone, Dubai World has been moving around and selling its assets as it looks to meet debt repayments.
DP World will seek shareholders approval for the acquisition and delisting at an extraordinary general meeting to be held in Dubai on December 18. The delisting is expected to take place on January 21, 2015 from when shares will only be able to be traded on the Nasdaq Dubai, where it is already listed, and the acquisition is expected to be completed in the second quarter of next year.
