DP World, Jebel Ali Free Zone
DP World is to return to full government ownership. Image Credit: Supplied
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Dubai (Bloomberg): DP World Ltd.’s parent company Port and Free Zone World has offered to acquire the 19.55 per cent of the port operator’s shares traded on Nasdaq Dubai, returning the company to private ownership.

DP World's parent company Port and Free Zone World will acquire the shares traded for $16.75, it said in a statement. They closed at $13 on Sunday.

DP World's parent company will pay Dubai World $5.15 billion to help the government-owned conglomerate with its outstanding commitments to banks.

This payment will help the port operator "implement its strategy without any restrictions from Dubai World's creditors," the company said in the statement. (The conglomerate has about $9.9 billion in debt maturing in 2022 and a further $1.1 billion due in 2026, according to data compiled by Bloomberg.)

The move will allow DP World to focus on its medium-to-long-term strategy of transforming from a global port operator to an infrastructure-led end-to-end logistics provider, it said in a statement on Monday. Once accepted, DP World will be 100 per cent owned by Port and Free Zone World, which in turn is a wholly-owned subsidiary of Dubai World.

DP World shares have fallen about 52 per cent from a recent peak in January 2018. They closed at $13 on Sunday.

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Dubai will pay a 29 per cent premium to acquire the 19.55 per cent of DP World Ltd.'s and return the port operator to private ownership.

"The disruption occurring in our industry throws up a number of challenges and opportunities for DP World in both the shorter and longer term," said Deepak Parekh, senior independent non-executive director of DP World. Delisting would give the company "greater flexibility going forward."

What the $5.15 billion will be used for
* It will aid DP World with its outstanding commitments to banks.
* The proceeds from the deal will also be used to settle other outstanding payments and transaction-related expenses of DP World. It will also allow DP World to fund potential redemption of its convertible bonds.
* Once accepted, DP World will be 100 per cent owned by Port and Free Zone World, which in turn is a wholly-owned subsidiary of Dubai World.