DP World is considering offering an opportunity for international investors to buy into the Jebel Ali Free Zone in the Emirate of Dubai, a valuable asset that has helped transform the emirate into World Trade CenterThe company is looking for ways to reduce its debt build-up.
The Dubai-based port operator is working with consultants to gauge interest in the sprawling industrial zone, Bloomberg reported, citing people familiar with the matter.
One of the sources, speaking on condition of anonymity, said that DP World is studying options that include selling a stake in the free zone or some of the assets located there.
The sources added that any sale is likely to attract the interest of infrastructure funds and strategic investors.
Deliberations are ongoing, and no final decisions have been made on the structure of a potential deal, according to agency sources who did not receive a response from a DP World representative for comment.
The Jebel Ali Free Zone attracts nearly a quarter of foreign direct investment to Dubai, with more than 8,000 companies having established operations in the commercial zone since its inception in the mid-1980s, according to its website.
Dubai saw 24.7 billion dirhams ($6.7 billion) of foreign direct investment in 2020, according to government figures.
State-owned DP World is exploring selling stakes in certain assets, reducing its leverage to around 4 times earnings by 2022, and maintaining its investment rating. It agreed to buy the free zone operator in a $2.6 billion deal in 2014.
Dubai floated a stake in DP World in early 2020 to ease its debt burden and avoid a repeat of the economic crisis that forced it into a rescue plan for the company in 2009.
In exploring the possibility of selling a stake in the Jebel Ali Free Zone, Dubai is also joining its regional neighbors Abu Dhabi and Saudi Arabia in seeking to open up to foreign investors by offering the opportunity to buy into the country’s assets.
DP World is one of the world’s largest operators of seaports and inland shipping terminals, stretching from the gates of London and Antwerp to hubs in Africa, Russia, India and the Americas. It has gone on an acquisition spree in recent years, buying assets from P&O Ferries and P&O Ferrymasters in Europe to ports and logistics in Chile.