UPDATED ON:
Wednesday, November 21, 2007
15:19 Mecca time, 12:19 GMT
 
Business
Dubai port company sale raises $5bn
Bin Sulayem, DP World's chairman, said there was strong international demand for the offer [EPA]

Dubai has sold $4.96bn of shares in port operator DP World in the Middle East's biggest initial public offering (IPO).
 
The emirate's sale of 23 per cent of shares in the company valued the world's fourth-largest container handler at $21.58bn.
 
At $1.30, the share price was at the top of a predicted range, that had been as low as $1.00.
Al-Khaleej, the UAE-based newspaper, said the offer had been 20 times oversubscribed, with investors offering $100bn in the IPO that began on November 4 and closed on Monday.

Strong demand

Individual investors will get 10 per cent of the shares on offer.

The holders of $3.5bn of bonds that DP World's then-owner - Ports, Customs & Free Zone Corp - sold last year, will get 25 per cent and institutional investors the remainder.

Sultan bin Sulayem, DP World's chairman, said: "There was strong demand for the shares internationally among institutions. DP World will have a solid base of international investors who are looking to grow value over time."
   
The port operator's net profit is expected to rise by 55 per cent next year to $564 million, to $630 million in 2009 and as much as $923 million in 2011, according to research by Dubai-based Shuaa Capital, one of the four banks that arranged the sale.

On Monday, Dubai lifted the stake it was selling in DP World by three percentage points following the stronger-than-expected demand.

Double capacity

DP World, which last year bought British port operator P&O for $6.8bn, manages 42 terminals in 22 countries.

Its biggest operation is Dubai's Jebel Ali port, followed by China's Qingdao and India's Nhava-Sheva.

Shuaa predicted the port operator's capacity would almost double by 2011 to 81 million containers per year, as it expands in Dubai, Britain, Romania and Turkey.

London-based Drewry Shipping Consultants, said container throughput in the Middle East, where DP World is the largest operator, should grow an average of 9.6 per cent per year for the next five years.

Middle East economies, especially in the Gulf, are expanding as oil prices surge to records approaching $100 per barrel, almost five times as much as six years ago.

 Source: Al Jazeera
 
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