DP World and CDPQ have announced an investment of US$5 billion in three of the port operator's UAE assets which would see the global investment firm take on a stake in Jebel Ali Port, Jebel Ali Free Zone, and the National Industries Park.
In a statement, DP World said CDPQ will invest US$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 22% stake, while the remainder of the transaction will be financed by debt.
DP World noted that other long-term investors will have the opportunity to acquire an additional stake of up to US$3 billion and the transaction implies a total enterprise value of approximately US$23 billion for the three assets.
The Jebel Ali Port, Free Zone, and National Industries Park generated a Pro-forma 2021 revenue of US$1.9 billion.
The Emirati multinational logistics company said the three assets will remain fully consolidated businesses within the DP World Group, and day-to-day operations, customers, service providers, and employees will not be affected.
"We believe this new partnership will enhance our assets and allow us to capture the significant growth potential of the wider region. 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," saidSultan 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, noted that the investment in Jebel Ali is another great illustration of the partnership between CDPQ and DP World, which now spans four continents and eighteen terminals.
"We are pleased to deepen our long-standing relationship with a world-class logistics and supply chain operator by investing in this strategic trade infrastructure, one that will play a pivotal role in the evolution of the global economy," Jaclot added.
The CDPQ executive noted that DP World is well positioned to provide innovative solutions to its customers worldwide and has the infrastructure that provides CDPQ with exposure to new fast-growing markets and trade routes in Africa and South Asia.
DP World said tranche 1 (US$5 billion) of the transaction is expected to close in the second or third quarter of 2022, and tranche 2 (up to US$3 billion) is expected to close during the fourth quarter of 2022.
