CDPQ to invest $5 bn in DP World’s three prized assets in UAE

 CDPQ to invest $5 bn in DP World’s three prized assets in UAE

Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ) will invest $5 billion in three UAE facilities owned by DP World, helping the Dubai-based maritime major lower its debt burden.

CDPQ will invest $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. It will finance the remaining amount by debt.

In addition to CDPQ, other long-term investors will have the chance to acquire an additional stake for up to $3 billion in the assets. The transaction values the three assets at $23 billion.

The two companies said the first phase of $5 billion of the transaction is expected to close in the second or third quarter of 2022. The second stage of up to $3 billion is expected to close during the fourth quarter of 2022.

The three assets are together part of an integrated facility for the supply and logistics chains of over 8,700 companies from around the world, serving more than 3.5 billion people globally. The three assets generated pro-forma 2021 revenue of $1.9 billion, DP World and CDPQ said in a joint statement.

The Jebel Ali Port is an international gateway port and the second largest outside of Asia. It serves the East-West trade corridor through its connectivity to 150 cities globally via more than 180 shipping lanes.

The Jebel Ali Free Zone is the largest free zone in the Middle East and one of the largest in the world. It is home to companies from 140 countries, including approximately 150 Fortune 500 enterprises.

The National Industries Park is a 21 sq km area designated for manufacturing and processing companies.

The three assets will remain fully consolidated businesses within the DP World Group.

Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World, said the transaction will help the UAE company achieve its objective of reducing its net leverage to below 4x net debt to EBITDA.

“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,” he said.

Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure at CDPQ, said: “This investment in Jebel Ali is another great illustration of the partnership between CDPQ and DP World, which now spans four continents and eighteen terminals.”

Aman Malik

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