The Dubai port operator, DP World Limited, has announced that it would be selling stakes in two container terminals and a logistics centre in Hong Kong for USD 742 million.
The decision has been made as part of a strategy to divest interests from non-core international markets. The strategy has been pursued since last year and allows DP World to make investments in fast-growing markets by exiting markets where the company has limited presence.
Presenting details about the move, Sultan Ahmed bin Sulayem, Chairman of DP World, said that “we believe Hong Kong will continue to be a very interesting market. However, our presence was small relative to the market. This reorganization, forming a strategic partnership and partially monetizing some assets, allows us to realize value and recycle capital into new, fast growing opportunities in other markets.”
DP World has decided to sell 75 percent of its stakes in container terminals CSX World Terminals Hong Kong Limited and ATL Logistics Centre Hong Kong Limited (ATL) to a unit of Australian warehouse operator Goodman Group for USD 463 million in cash. Further, the company’s 55.2 percent stake in Asia Container Terminal Ltd, which operates Asia Container Terminal 8 West (CT8), will also be sold to Hutchison Port Holdings Trust for USD 279 million. As a result of the disposals, DP World is expected to record a net gain of USD 151 million and boost its capital levels.
DP World expects to get regulatory approval for the deal in first half of the current year. According to company sources, the disposed assets contributed USD 39 million to gross profit in 2012. However, even though the assets were core, the money would be invested in markets where the company exercises greater control. In October last year, DP World sold its quarter stake in a Russian container terminal to Global Ports Investment for USD 230 million. During 2012, the company also wound-down it’s operations in Belgium and Yemen.